Key Points

• Retroactive duties: U.S. trade-remedy rates fell to 24.75% for most covered Canadian producers, but the finalized rates also apply to 2024 lumber shipments.
• Major financial charges: Interfor expects US$74.7 million in additional duties and interest; Canfor expects C$45.9 million in duty expense.
• Industry pressure continues: Western Forest Products anticipates US$33.1 million in additional duties and interest while keeping two Vancouver Island mills curtailed.

SCRAPMONSTER EDGE | FOREST PRODUCTS ANALYSIS

Lower Duties Today Do Not Erase Earlier Liabilities

The new 24.75% rate represents a 10.41-percentage-point reduction in current trade-remedy duties for most covered producers. Yet companies that deposited less against their 2024 shipments now face additional accounting charges, even as their forward-looking rates decline.

Industry takeaway: Lumber producers and buyers must distinguish current border costs from historical duty assessments. Both can affect financial planning, while weak lumber demand and production curtailments continue to pressure operating results.

U.S. Finalizes Lower Rates on Canadian Softwood Lumber

The U.S. Department of Commerce finalized its seventh administrative reviews in October, setting the general combined antidumping and countervailing duty rate at 24.75%.

Canfor, which was examined individually, received a combined rate of 31.11%, comprising a 17% antidumping duty and a 14.11% countervailing duty.

A separate 10% Section 232 tariff remains applicable to covered softwood lumber imports, meaning the reduction in trade-remedy duties does not eliminate the broader U.S. tariff burden.

The final results apply retroactively to covered 2024 shipments. During that year, many companies initially paid combined deposits as low as 8.05%, before higher rates took effect.

Interfor, Canfor and Western Face Substantial Charges

Interfor expects to recognize US$63.3 million in additional non-cash duty expense and US$11.4 million in related interest during the fourth quarter of 2026.

The company also reported a third-quarter net loss of C$45.6 million, compared with a C$1 million profit in Q2. The loss was driven largely by a C$53.2 million non-cash impairment related to a previously curtailed Eastern Canadian mill.

Canfor expects a C$45.9 million fourth-quarter duty expense following the finalization of its 2024 rates. The company continues adjusting its operating footprint, including the permanent closure of its Fox Creek sawmill and the planned shutdown of its Northwood pulp mill by year-end.

Western Forest Products anticipates US$27.6 million in additional non-cash export duty expense and approximately US$5.5 million in accrued interest. Its 2024 shipments carried weighted average deposits below the newly finalized 24.75% combined rate.

Western also expects its Cowichan Bay and Chemainus sawmills on Vancouver Island to remain curtailed for the rest of 2026 amid weak market conditions, high duties and other regional operating challenges.

Lumber Producers Face Continued Market and Trade Pressures

The latest duty adjustments come as Canadian lumber producers contend with weak demand, high operating costs and ongoing production curtailments.

Interfor says approximately one-fifth of its lumber crosses from Canada into the United States, while around 65% is manufactured and sold within the U.S., reducing its direct exposure to Canadian export duties.

The U.S. Lumber Coalition welcomed the Commerce Department's final determinations, maintaining that Canadian producers benefited from unfair trade practices. Canada and its lumber industry continue to dispute the U.S. findings and pursue trade challenges.

Global Affairs Canada expects the final results of the eighth administrative reviews, covering 2025 shipments, between February and August 2027.

The next review could bring further adjustments, but any resulting rates and financial implications remain uncertain until the determinations are finalized.