U.S. to Cut Canadian Lumber Duties by 10% — Rate Stays at 35%
Canada currently meets approximately 25 per cent of annual U.S. softwood demand, supplying a critical portion of the 15,000 board feet of framing lumber embedded in a standard single-family home.
SEATTLE (Scrap Monster): The U.S. Department of Commerce has moved to cut the combined antidumping and countervailing duty rate on most Canadian softwood lumber by 10 percentage points to 24.83 per cent, in the first downward preliminary revision of a dispute that has run continuously since 1982. That is according to new documents obtained by POLITICO, which confirms that the current 35.16 per cent combined rate remains in force until a final determination expected in late August 2026.
Whilst the preliminary figures set antidumping duties at 10.66 per cent, down from 20.53 per cent, and reduce countervailing duties marginally from 14.63 per cent to 14.17 per cent for most producers, the revision carries a caveat that will frustrate Canadian mills: the 10 per cent Section 232 tariff imposed under the Trade Expansion Act of 1962 in October 2025 sits on top of any revised duty rate, holding the effective combined burden at 34.83 per cent rather than the 24.83 per cent. The preliminary determination covers lumber traded during calendar year 2024, with Canfor, Resolute and West Fraser named as mandatory respondents.
Sustained financial losses under the current 45.16 per cent all-in rate had already extracted a steep toll before the announcement, with Canfor permanently closing its Estill and Darlington mills in South Carolina in August 2025 and removing 350 million board feet of annual capacity from the North American supply chain. Canadian lumber import volumes fell a further 28 per cent year-on-year to 1,569,300 cubic metres in January 2026, with cross-border prices collapsing from $218 per cubic metre to $158 over the same 12 months, as Wood Central reported last month.
The U.S. Lumber Coalition moved quickly to claim that the reduction was confirmation of ongoing misconduct rather than a concession, with Executive Director Zoltan van Heyningen stating the preliminary results “confirm, yet again, that Canada continues to trade unfairly in softwood lumber.” Van Heyningen cited a fourfold production-to-consumption gap: Canada consumes an estimated 7 billion board feet annually, whilst holding capacity to produce 27 billion, a structural imbalance the coalition argues is only commercially viable through sustained government subsidy.
Meanwhile British Columbia’s Forests Minister Ravi Parmar told reporters the province was disappointed the United States had “signalled that it will continue to impose unwarranted and unfair duties” on Canadian softwood, arguing the levies “serve only to damage both of our economies” by raising construction costs for American homebuilders whilst accelerating job losses in B.C. forestry communities already battered by wildfires and a sustained mountain pine beetle outbreak that has stripped tens of millions of acres of productive Crown forest.
Whilst the Canadian federal government has since committed C$1.2 billion in total loan guarantees for domestic producers through the Business Development Bank of Canada’s Softwood Lumber Guarantee Program, Parmar has consistently argued that financial support is no substitute for a negotiated settlement.
Among the businesses most poorly served by the current mechanism are independent wood processors who purchase timber on the open market, hold no Crown land allocations, receive no provincial subsidies, yet face the same duty regime as integrated producers. “Our businesses buy wood the same way American companies do — we go into the market and pay the market price,” said Brian Menzies, executive director of the Independent Wood Processors Association, who called the dispute’s broadening reach into the open market increasingly difficult to justify. “This is beginning to look less like trade enforcement and more like protectionism masquerading as trade policy,” Menzies said.
Canada currently meets approximately 25 per cent of annual U.S. softwood demand, supplying a critical portion of the 15,000 board feet of framing lumber embedded in a standard single-family home, according to the National Association of Home Builders, which has estimated that combined tariffs and duties have added at least US$10,000 to the cost of a new dwelling. Full-year 2025 single-family housing starts fell 7 per cent to 943,000 units, the weakest result since the pandemic recovery, according to data published by Madison’s Lumber Reporter, underscoring the compounding cost pressures on an already-constrained U.S. homebuilding market.
With final results due by early August 2026, the preliminary 10.66 per cent antidumping rate remains subject to further revision following submissions from Canfor, Resolute and West Fraser, whose capacity levels and trading behaviour during calendar year 2024 will shape the final determination. The sixth annual review, by comparison, pushed the antidumping rate from 7.66 per cent to 20.53 per cent, a nearly threefold increase that drove combined trade barriers to their highest level since the current round of AD/CVD proceedings began in 2017.
Courtesy: www.woodcentral.com.au