Canada's Non-US Softwood Lumber Sales Fall 3% as Total Exports Drop 12% in First Half of 2026

Statistics Canada data show softwood shipments to markets outside the United States kept falling in the first half of 2026, even as buyers in six new destinations couldn't offset a steep drop in US demand. The US still took 89% of Canada's lumber exports, which crossed the border under a combined tariff rate of 34.83%.

What the Trade Data Showed

Sawmillers across Canada sold less softwood lumber outside the United States in the first half of 2026 than a year earlier. Shipments to every market beyond the American border fell 3%, while US demand dropped by 1.73 million cubic metres.

That is according to Statistics Canada trade data published on August 4, which puts total exports for the six months at 13.2 million cubic metres, down 12%. The American share of the trade slipped one percentage point, to 89%.

Buyers in the six destinations that grew took 77,000 cubic metres more than a year earlier, covering 4% of the American shortfall on Wood Central's division of the published totals. Importers everywhere else took 128,000 cubic metres less, leaving non-US trade down 51,000 cubic metres, to 1.5 million for the half.

Nine of every ten cubic metres Canada exports still cross the southern border, and they do so under combined antidumping, countervailing, and Section 232 tariffs that leave most producers paying an effective rate of 34.83%. US-bound shipments fell 13%, to 11.7 million cubic metres across the half — a steeper decline than the export trade recorded overall.

Where Exports Grew and Where They Fell

China moved the largest volume of any market outside the US, taking 525,000 cubic metres, 3% more than a year earlier. Taiwan recorded the largest absolute gain of any non-US destination, adding 26,000 cubic metres to reach 187,000. Mexico grew fastest in percentage terms, rising 68% to 49,000 cubic metres, while Japan ranked third among Canada's destinations at 373,000 cubic metres, down 19%.

Why Price Gaps Matter

Every one of those alternative markets pays more per cubic metre than the United States does. Japanese buyers take Canadian softwood at nearly twice the American unit value across the border, and German buyers pay more than three times it. Germany cut its intake by 40%, to 33,000 cubic metres.

Ottawa's Response: New Diversification Funding

It comes as Ottawa committed nearly C$130 million to 56 forest-sector projects in June, the newest tranche of a diversification effort the federal government began in August 2025, when it pledged $500 million to product and market diversification.

The two largest June grants allocated $14.9 million to the Canada Wood Group for demand-building in Japan, South Korea, and China, and $13.1 million to BC's Forestry Innovation Investment for regulatory pathways into China, India, Vietnam, the UK, and Europe.

Industry Pushback and Jobs at Stake

'These actions will increase costs on our American neighbours, full stop,' Derek Nighbor, president and CEO of the Forest Products Association of Canada, said in July of Washington's proposal to put 50% tariffs on a wider range of Canadian forest products from this month. The sector he represents employs nearly 200,000 people directly, according to the association, with as many again working in transport, manufacturing, and maintenance jobs behind the scenes.

What Happens Next

The US Department of Commerce issues its final duty determination on Canadian producers before the end of August, and the recipients of Ottawa's June grants scope their codes, testing, and market access work over years rather than quarters.

A year on from the first federal diversification package, Canada sells less lumber outside the United States than it did when the money was pledged.

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Courtesy: www.woodcentral.com.au