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U.S. Cuts Canadian Softwood Lumber Tax Burden to 34.75%
Canadian softwood lumber entering the United States now faces a combined import burden of 34.75% following the U.S. Department of Commerce's latest administrative review. That is a substantial reduction from the previous 45.16% all-in rate, but Canadian producers still face a border cost more than twice the comparable trade-duty level in effect two years ago.
By Paul Ploumis
Published October 15, 2026
Key Points
- Countervailing duty: 14.11%.
- Anti-dumping duty: 10.64%.
- Combined AD/CVD rate: 24.75%.
- Section 232 tariff: Additional 10%.
- Total current burden: 34.75%.
- Previous all-in rate: 45.16%.
- Reduction: ↓10.41 percentage points, or about 23%.
- 2024 comparison: The all-others combined AD/CVD rate was 14.40% before the Section 232 lumber tariff existed.
SEATTLE (Scrap Monster): Canadian softwood lumber producers received some relief from U.S. trade duties this week, but shipments entering the American market continue to face a substantial combined tax burden.
The U.S. Department of Commerce's final seventh administrative review set the countervailing duty rate at 14.11% and the anti-dumping rate at 10.64%, according to the BC Lumber Trade Council.
Together, those trade-remedy duties equal 24.75%.
A separate 10% Section 232 tariff on softwood timber and lumber remains in place, taking the combined burden to 34.75%.
The new total is well below the previous 45.16% all-in burden, but it remains historically high for a cross-border lumber trade that supplies a significant share of U.S. construction demand.
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The latest review provides genuine relief, but the longer comparison shows how dramatically the cost of shipping Canadian lumber into the U.S. has changed.
In September 2024, the amended “all others” rate from the fifth administrative review stood at 14.40%.
There was no additional Section 232 softwood lumber tariff at that time.
By September 2025, the sixth review had pushed the comparable combined anti-dumping and countervailing rate to 35.16%.
Then, beginning October 14, 2025, a separate 10% Section 232 tariff lifted the effective combined burden to 45.16%.
The latest seventh review cuts the AD/CVD portion to 24.75%, producing today's 34.75% all-in rate.
| Period | AD/CVD Rate | Section 232 | Illustrative All-In Burden |
|---|---|---|---|
| 2024 AR5 | 14.40% | None | 14.40% |
| 2025 AR6 + Section 232 | 35.16% | 10% | 45.16% |
| 2026 AR7 + Section 232 | 24.75% | 10% | 34.75% |
The result is a 10.41-percentage-point reduction from last year's peak burden.
But compared with the 14.40% all-others trade-duty rate in 2024, the current 34.75% total is still approximately 2.4 times as high.
That is why the latest decision can simultaneously be described as significant relief and a continuing major trade barrier.
What That Means Per $1,000 of Customs Value
Another way to see the change is to apply the rates to an illustrative $1,000 of lumber customs value for a shipment subject to those benchmark rates.
| Rate Environment | Burden per $1,000* |
|---|---|
| 2024 — 14.40% | $144.00 |
| 2025 peak — 45.16% | $451.60 |
| Current — 34.75% | $347.50 |
*Simple illustration using the stated percentage rates. Actual liability varies by producer, product, review history and applicable customs treatment.
The new rate therefore represents roughly $104 less per $1,000 of customs value compared with the previous 45.16% burden.
But it remains about $204 per $1,000 higher than the comparable 2024 rate.
All of the Latest Relief Comes From AD/CVD Rates
The reduction does not reflect a rollback of the Trump administration's national-security tariff on lumber.
The 10% Section 232 tariff remains unchanged.
Instead, the improvement comes entirely from Commerce's annual recalculation of the anti-dumping and countervailing duties.
The previous amended all-others AD/CVD rate was 35.16%.
The latest combined rate is 24.75%, a reduction of 10.41 percentage points.
This distinction is important because the two sets of measures come from different legal processes.
Why Are There Three Different Charges?
Canadian softwood lumber can be affected by three separate U.S. trade measures.
| Measure | Current Benchmark | Purpose |
|---|---|---|
| Anti-Dumping Duty | 10.64% | Addresses the U.S. Commerce Department's determination concerning sales below what it considers fair value. |
| Countervailing Duty | 14.11% | Addresses subsidies Commerce determines benefit Canadian producers. |
| Section 232 Tariff | 10% | Separate national-security tariff imposed on softwood timber and lumber. |
Canada and Canadian producers continue to dispute the basis for the anti-dumping and countervailing duties.
The BC Lumber Trade Council described the measures as unjustified and continues to call for a negotiated settlement.
The Section 232 Lumber Tariff Remains at 10%
President Donald Trump imposed the Section 232 tariff after a Commerce Department investigation concluded that imports of timber, lumber and certain wood products threatened to impair U.S. national security.
The tariff took effect on October 14, 2025.
Softwood timber and lumber are subject to a 10% ad valorem tariff.
The White House subsequently delayed scheduled increases affecting certain furniture, cabinets and vanities, but the 10% softwood lumber tariff itself remains in force.
Canada Remains Critical to U.S. Lumber Supply
The rate matters beyond Canadian mills because the United States remains heavily dependent on imported softwood lumber.
The National Association of Home Builders estimates that the U.S. imports roughly one-third of the lumber it consumes.
Canada supplies approximately 85% of U.S. softwood lumber imports and close to one-quarter of overall U.S. lumber supply.
That dependence limits how quickly Canadian lumber can be displaced without changes in U.S. sawmill output or additional imports from other producing countries.
The BC Lumber Trade Council argues that Canadian spruce-pine-fir and U.S. Southern Yellow Pine also serve different applications and should not be viewed as perfectly interchangeable products.
Canadian Lumber Exports Fell in 2025
Global Affairs Canada records show Canadian softwood lumber exports to the United States totaled approximately 10.63 billion board feet in 2025.
That compares with approximately 12.00 billion board feet in 2024.
The annual decline was roughly 11.4%.
The decrease should not be attributed solely to duties. Lumber prices, housing demand, mill operating rates, timber supply, freight and exchange rates also influence cross-border shipments.
Still, the decline illustrates the scale of the trade relationship at the same time that border costs were moving sharply higher.
B.C. Has More Exposure Than Any Other Canadian Producing Region
British Columbia remains particularly exposed to the dispute.
Statistics Canada reports that the B.C. Interior was Canada's largest softwood-producing region in 2024 and accounted for approximately 32% of Canada's total softwood lumber exports to the United States.
That makes changes in U.S. duty rates especially important for Interior sawmills, forestry contractors and forest-dependent communities.
Housing Industry Also Wants Lower Lumber Trade Costs
The Canadian industry is not alone in opposing high lumber tariffs.
The National Association of Home Builders has repeatedly argued that additional lumber tariffs increase costs for an already challenged U.S. housing market.
NAHB says U.S. sawmills have not yet expanded sufficiently to replace imported Canadian supply.
That does not mean a 34.75% duty translates directly into a 34.75% increase in retail lumber or home prices.
Actual pass-through depends on exchange rates, lumber market conditions, producer margins, wholesaler behavior and the relative availability of competing supply.
But higher border costs become another component in the delivered cost of imported Canadian lumber.
ScrapMonster Intelligence: This Is Relief, Not a Reset
The latest review changes the economics of Canadian lumber shipments, but it does not return the trade relationship to its earlier baseline.
Three numbers tell the story:
- 45.16% — the previous all-in benchmark after the sixth review and Section 232 tariff.
- 34.75% — the new combined benchmark.
- 14.40% — the comparable all-others AD/CVD rate in 2024, before the Section 232 lumber tariff.
The immediate improvement is significant. A 10.41-percentage-point reduction gives affected Canadian exporters materially more room than they had under last year's peak rate.
But structurally, the border remains much more expensive than it was only two years ago.
That makes the latest decision a margin-relief story rather than a normalization story.
For mills operating near breakeven, that distinction matters. Lower cash-deposit requirements can improve working capital and shipment economics, but a 34.75% combined burden is still high enough to influence production decisions, export competitiveness and investment planning.
Annual Reviews Mean Rates Can Change Again
The Commerce Department conducts administrative reviews of the anti-dumping and countervailing duty orders each year when requested by interested parties.
The seventh review covers an earlier period of trade and establishes updated cash-deposit rates for companies covered by the review.
The eighth administrative review has already been initiated, meaning the current rates should not be viewed as permanent.
Company-specific rates can also differ from the broader rates cited by the BC Lumber Trade Council depending on the producer's review status.
Industry Continues to Call for a Negotiated Settlement
BC Lumber Trade Council Interim President Kim Haakstad said the lower rate does not resolve the industry's underlying concern.
The organization argues that nearly a decade of renewed trade litigation has created uncertainty for mills, workers and forestry communities.
The council also maintains that a negotiated softwood lumber agreement would provide greater predictability than annual administrative reviews and continuing litigation.
What to Watch Next
New cash-deposit rates: The practical impact will become clearer as the final Commerce results take effect for affected exporters.
Company-specific rates: Individual Canadian producers may face different effective duty rates from the headline benchmark.
Eighth administrative review: Another annual review is already underway, meaning AD/CVD rates can move again.
Section 232: The separate 10% softwood lumber tariff remains intact and is not reduced by the latest administrative review.
Canadian exports: Shipments to the U.S. fell from about 12.0 billion board feet in 2024 to 10.63 billion in 2025. Future volumes will show whether lower duties improve cross-border flows.
U.S. housing: Builders remain dependent on Canadian supply, making lumber costs relevant to construction and affordability.
Trade negotiations: A negotiated Canada-U.S. settlement remains the industry's preferred route to longer-term certainty.
ScrapMonster Market Read: The seventh review is clearly better news for Canadian producers than last year's duty shock. The effective headline burden falls from 45.16% to 34.75%, cutting roughly $104 from the border cost for every illustrative $1,000 of customs value subject to those rates. But describing this as a return to normal would miss the bigger picture. The comparable all-others rate was only 14.40% in 2024, before the 10% Section 232 tariff existed. Canadian lumber therefore remains considerably more expensive to move across the U.S. border than it was two years ago. The latest ruling improves margins; it does not end the trade problem.
Sources: BC Lumber Trade Council; U.S. Department of Commerce; Government of Canada; Province of British Columbia; White House; Statistics Canada; National Association of Home Builders.
