The Commerce Department says the higher tariffs offset unfair subsidies, while Canadian officials say the move will fuel inflation.
Wood for processing is stacked at the C.A. Spencer sawmill in Lachute, Canada, on April 10, 2025. Andrej Ivanov/Getty Images
The U.S. Department of Commerce has finalized its latest review of countervailing duties on Canadian softwood lumber, more than doubling the rate for most producers in a decision that drew criticism from Canadian officials and industry groups.
The department said in an Aug. 8 release that its latest annual administrative review found that Canadian lumber was “unfairly subsidized” at rates ranging from just over 12 percent to nearly 17 percent.
The department then set the final tariff rate for most Canadian producers—those not individually examined—at 14.63 percent, up from 6.74 percent in the previous review.
The hike comes on top of anti-dumping duties recently raised to 20.56 percent, pushing the combined tariff rate on most Canadian softwood to 35.19 percent. The Commerce Department said U.S. Customs and Border Protection will begin collecting at the new rates immediately.
The move drew praise from the U.S. Lumber Coalition, which said that the measures offset the subsidies that Canadian producers receive from their government.
“Canada’s arrogant and abusive unfair trade behavior knows no bounds,” Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, said in a statement.
“Canada has once again demonstrated that it feels entitled to its access to the U.S. market for its massive excess lumber capacity and has gone as far as stating that Canada does not think that the U.S. trade laws should apply to their unfair trade.”
Andrew Miller, Owner of Stimson Lumber Company, accused Canada of escalating its dumping practices “significantly” over the past four years in a bid to maintain its market share in the United States at the expense of American lumber producers, workers, and communities.
The U.S. lumber industry has long said that Canadian producers enjoy an unfair advantage due to government subsidies.
By contrast, the tariff announcement drew swift pushback from Canadian officials and industry leaders, who said the higher duties will worsen housing affordability and strain communities on both sides of the border.
Ravi Parmar, the Minister of Forests for the Canadian province of British Columbia, criticized the decision in a statement on social media, saying it would be inflationary for both Canadian and U.S. consumers, while vowing to take “every legal avenue available to fight back.”
“Two words describe [U.S. President] Donald Trump’s latest move to increase countervailing duties on Canadian softwood lumber: absurd and reckless,” he wrote.
“These duties do nothing but drive up the cost of building materials, stalling home construction in the United States at a time when American families are already struggling with a housing crisis.”
Kurt Niquidet, president of the BC Lumber Trade Council, said in a statement that the tariffs place “unnecessary strain on forestry-dependent regions in Canada while driving up construction costs for American builders.” The group urged both governments to prioritize a negotiated settlement.
In early August, shortly after the U.S. Commerce Department announced the higher anti-dumping duties against Canadian lumber imports, lumber futures soared to a three-year high, as traders priced in the higher tariffs.
Amid the percolating U.S.-Canada lumber feud—which dates back to the 1980s—Canadian Prime Minister Mark Carney traveled to British Columbia this week, promising around $1.2 billion Canadian dollars ($900 million) in support for the local lumber industry to offset the impact of U.S. tariffs.
In response to Carney’s move, the U.S. Lumber Coalition called on Trump to “respond forcefully” with new tariffs.
“Canada’s latest $1.2 billion subsidy announcement for its softwood lumber industry will result in job losses in the U.S. forestry sector, plain and simple,” Miller said in a statement.
“We urge President Trump to respond forcefully to this latest Canadian defiance of our trade laws by imposing substantial new tariffs under Section 232. In order to realize continued growth of the U.S. lumber industry, Canada’s flagrant trade law violations must be stopped now.”
In July, the United States opened a Section 232 investigation under federal trade law to assess whether “unfair subsidies and foreign government support for foreign timber, lumber, and their derivative products” pose a national security threat.
A presidential executive order issued in March warned that “the United States faces significant vulnerabilities in the wood supply chain from imported timber, lumber, and their derivative products being dumped onto the United States market.”
The order instructed Commerce Secretary Howard Lutnick to carry out the probe and deliver his findings by the end of 2025.