US Cuts Canadian Softwood Lumber Duties to 24.75 Percent

Canadian softwood lumber exporters will face lower US trade duties following the US Department of Commerce's latest administrative review, finalized in October 2026. The decision reduces combined anti-dumping and countervailing duties from 35.16% to 24.75%, providing some relief to producers while leaving a separate tariff in place that keeps total import taxes at 34.75%.

According to the National Association of Home Builders (NAHB), the revised rates were announced after the department's seventh administrative review of existing trade orders. The anti-dumping rate fell from 20.53% to 10.64%, while the countervailing duty declined from 14.63% to 14.11%.

The additional 10% tariff imposed by President Donald Trump under Section 232 applies on top of those duties. As a result, Canadian softwood lumber continues to face substantial costs when entering the US market, despite the reduction in the two trade measures.

The dispute dates back to the expiration of a Canada-US softwood lumber agreement in 2015. The US Department of Commerce has argued that provincial stumpage fees for harvesting timber from publicly owned Crown land allow Canadian producers to sell lumber at unfairly low prices compared with US market conditions.

According to CIBC Capital Markets, the United States has collected approximately US$8.6 billion, equivalent to C$12.2 billion, in duties associated with the dispute. The funds remain on deposit, earning interest, and could be distributed as part of a future resolution.

Canadian industry representatives criticized the continued trade restrictions, arguing that they burden forestry businesses, threaten employment and increase construction costs in the United States.

Kim Haakstad, interim president of the BC Lumber Trade Council, said the lower rate does not resolve the industry's concerns about the trade measures.

"The combined weight of duties and tariffs continues to place a significant burden on Canadian lumber producers," Haakstad said.

Haakstad said the dispute has placed jobs, mills and forestry communities across British Columbia under pressure for nearly a decade. The council also argues that US homebuilders depend on Canadian spruce-pine-fir lumber because domestic production cannot satisfy all demand, while spruce-pine-fir and Southern Yellow Pine serve complementary roles in construction.

Haakstad said the industry needs a negotiated settlement that recognizes demand on both sides of the border.

"Lumber crosses our shared border because builders on both sides need it," Haakstad said.

The Ontario government also opposed the continued duties. Associate Minister of Forestry Kevin Holland, Minister of Natural Resources Mike Harris and Minister of Economic Development, Job Creation and Trade Vic Fedeli said the measures hurt workers and businesses in both countries and raise costs for American families.

The Ontario officials maintained that reducing the combined duty rate to 24.75% did not justify retaining the measures. They called for the United States to eliminate softwood lumber duties and tariffs and negotiate a lasting agreement with Canada.

In the United States, the National Association of Home Builders urged the Trump administration to suspend tariffs on building materials and pursue a new bilateral agreement.

"With housing affordability near a historic low, the National Association of Home Builders continues to urge the Trump administration to suspend tariffs on all building materials, including Canadian lumber, and promptly negotiate a new softwood lumber agreement with Canada that eliminates tariffs," the association said.

The association has also supported legislation in the US Senate and House of Representatives that would exempt many homebuilding materials from current and future tariffs. It argues that trade restrictions increase expenses for builders and consumers at a time when housing affordability remains a concern.

US industry representatives defended the duties. Zoltan van Heyningen, executive director of the US Lumber Coalition, said the Commerce Department's findings supported the US position that Canadian lumber trade remained unfair. Coalition chair Steve Swanson said Canada's share of the US lumber market had fallen to levels last seen in the 1970s.

The revised duties also establish different rates for some producers individually examined by the Commerce Department. Canfor's anti-dumping rate fell to 17% from 35.47%, while West Fraser received a rate of 4.71% and Resolute a rate of 13.13%. Other producers and exporters not examined individually, including Interfor and Weyerhaeuser, fall under the combined 24.75% rate.

The department also removed 105 companies from the anti-dumping review, including 93 whose requests for individual review had been withdrawn. According to Global Affairs Canada, the department opened its eighth administrative review in March and again selected Resolute and West Fraser for individual examination.

In New Brunswick, the lower duties have renewed questions about provincial support for forestry companies. The provincial government reduced Crown timber royalty rates in July 2025 to help protect the sector from mill curtailments and closures. Royalty revenue subsequently fell by C$45 million in the following fiscal year, while the government projected a further C$2.1 million decline as stumpage rates were revised downward again.

New Brunswick Premier Susan Holt had made lower softwood lumber tariffs a prerequisite for her government to agree to a trade deal with the United States. Meanwhile, the US Commerce Department's final duty determinations cover Canadian lumber shipments from 2024, with customs assessments scheduled to begin no earlier than 41 days after publication of the final results in the Federal Register.