Canada–U.S. Trade Talks Resume as Lumber and Steel Tariffs Return to Focus
Canada and the United States are moving toward renewed trade negotiations after talks collapsed in August. Discussions are focusing on national-security tariffs affecting lumber, steel and other industries, although no final agreement has been reached.
Key Points
- Trade negotiations: U.S. Commerce Secretary Howard Lutnick has led efforts to restart discussions following their August collapse, according to CTV News.
- Lumber tariffs: A previous draft agreement would have removed the separate 10% Section 232 tariff on Canadian softwood lumber.
- Existing duties: Most covered Canadian producers face combined anti-dumping and countervailing duties of 24.75%, separate from the 10% tariff.
- Other sectors: Steel, aluminum, automobiles and potentially energy exports are also part of the discussions.
- Next steps: Formal negotiations could resume, although no final terms or timetable have been confirmed.
MONTREAL (Scrap Monster): The United States and Canada are moving toward renewed trade negotiations over tariffs on lumber, steel and other products, following direct discussions between President Donald Trump and Canadian Prime Minister Mark Carney.
According to CTV News, citing sources in both countries, U.S. Commerce Secretary Howard Lutnick initiated efforts to revive negotiations more than 10 days ago, following the breakdown of talks in August.
Carney said officials would continue working toward an agreement in the coming weeks, while Trump indicated that the two countries had developed the broad outline of a possible deal.
ScrapMonster Edge: Removing the 10% Lumber Tariff Would Not End the Duty Dispute
The key distinction for Canadian lumber exporters is that Section 232 tariffs and anti-dumping/countervailing duties are separate trade measures.
For most covered Canadian softwood lumber producers, the October Commerce review established combined trade-remedy duties of 24.75%. Adding the separate 10% Section 232 tariff produces a headline burden of 34.75%.
Removing only the Section 232 levy would reduce that headline burden by 10 percentage points, but the remaining anti-dumping and countervailing duties would continue unless separately changed.
Industry takeaway: A negotiated reduction in lumber tariffs could improve conditions for Canadian exporters and U.S. buyers, but the actual benefit will depend on which duties are removed, whether any quotas apply and the final terms of the agreement. Renewed talks are not the same as confirmed tariff relief.
Lutnick Leads Effort to Restart Canada–U.S. Negotiations
The latest discussions follow the breakdown of trade negotiations in August, when the countries failed to finalize an agreement over disputed terms.
U.S. Trade Representative Jamieson Greer previously said Canada had declined to conclude the deal under terms negotiated earlier that week. Carney subsequently described additional U.S. demands as unfair.
CTV News reported that Lutnick introduced last-minute conditions contributing to the collapse, according to sources familiar with Canada's negotiating position.
Negotiations have since intensified, with political attention focused on U.S. tariffs affecting Canadian industries ahead of the November 3 midterm elections.
Earlier Draft Deal Offered Relief on Lumber and Auto Tariffs
A draft agreement discussed in August would have eliminated the 10% national-security tariff on Canadian softwood lumber and reduced U.S. tariffs on certain Canadian automobiles from 25% to 15%, according to the earlier reporting.
However, the two countries did not reach a final agreement.
Canadian softwood lumber currently faces a separate 10% Section 232 tariff in addition to applicable anti-dumping and countervailing duties.
Following the U.S. Department of Commerce's October review, the combined anti-dumping and countervailing rate for most covered Canadian producers was set at 24.75%. Individual company rates vary.
For covered products subject to both measures, the separate 10% Section 232 levy raises the combined headline duty burden to 34.75%.
Canadian Lumber Producers Remain Divided From U.S. Industry Groups
Canadian forest products organizations have repeatedly called for relief from both the newer national-security tariff and the longstanding softwood lumber duties.
The Forest Products Association of Canada has identified the measures as continuing trade concerns, while the BC Lumber Trade Council and BC Council of Forest Industries have emphasized their importance in bilateral negotiations.
The U.S. Lumber Coalition, representing American softwood producers, has taken a different position, supporting continued enforcement of U.S. trade-remedy measures on Canadian lumber.
The disagreement illustrates why removal of one tariff would not necessarily resolve the broader softwood lumber trade dispute.
Cabinetry, Plywood and Other Wood Products Face Separate Trade Measures
The negotiations also come amid changes to U.S. tariffs affecting other wood products.
Tariffs on certain imported kitchen cabinets and vanities are scheduled to increase from 25% to 50% on January 1, 2027, subject to the applicable trade rules and any subsequent agreement.
Washington has also modified the products covered by its separate 50% tariffs on certain Canadian imports, including changes involving plywood, medium-density fiberboard and flooring.
These measures operate under different legal provisions and should not be treated as interchangeable with the softwood lumber Section 232 tariff.
Trade Talks Could Expand to Energy and Keystone XL
According to sources cited by CTV News, formal negotiations could resume with Greer participating alongside other U.S. and Canadian officials.
Potential discussions may extend beyond Section 232 tariffs to energy exports, including the proposed Keystone XL pipeline.
For lumber and steel producers, the immediate issue remains whether the two governments can translate renewed discussions into an agreement that changes existing trade costs.
No final tariff concessions, implementation dates or broader trade agreement have been confirmed.
Courtesy: www.woodcentral.com.au