Escalating Trade Measures Target Canadian Lumber
President Donald Trump has announced new tariffs on imported timber and wood products, including an additional 10% tariff on Canadian lumber, according to administration officials. These measures, implemented on September 29, 2025, build upon 35% tariffs imposed in August, potentially bringing total duties on Canadian softwood lumber imports to over 45% starting October 15. Sources indicate this represents the latest development in a trade dispute dating to the 1980s, when U.S. producers first alleged Canadian companies benefited from unfair government subsidies.
The administration’s actions are reportedly based on findings from a Commerce Department investigation that concluded Canadian companies were selling lumber at unfairly low prices. Analysts suggest this longstanding trade tension reflects fundamental differences in how the two countries manage their forestry resources and timber harvesting practices.
National Security Concerns Drive Policy Shift
The Trump administration has framed these trade measures as necessary for national security, with officials pointing to a March 2025 executive order that directed the Commerce Department to assess how timber imports affect U.S. security. The report states that overreliance on imported wood products means “the United States may be unable to meet demands for wood products that are crucial to the national defense and critical infrastructure.”
According to reports, President Trump claims the U.S. has capacity to meet 95% of softwood lumber demand and has directed federal agencies to update policies to expand domestic timber harvesting. In March, he issued an executive order telling the Departments of Interior and Agriculture to ease what he characterized as “heavy-handed” regulations, with the goal of boosting domestic timber production by 25%.
Market Dynamics and Housing Sector Impact
The report states that lumber, particularly softwood varieties like pine and spruce, is critical to U.S. home construction, with availability and price directly affecting housing costs. The U.S. imports approximately 40% of its softwood lumber annually, with over 80% of those imports coming from Canada, according to trade data.
Analysts suggest lumber demand closely tracks housing starts, the economic indicator measuring new home construction. During the Great Recession from 2007-2009, housing starts plummeted from a peak of 2.3 million in January 2006 to under 500,000 by January 2009 – a nearly 80% decrease. In that same period, imports of Canadian lumber fell by more than 60%, and domestic softwood lumber production declined by over 40%.
Recent import data shows the U.S. imported more than $11 billion in forest and wood products from Canada in 2024, with softwood lumber accounting for almost half that value. The volume of Canadian lumber imports has fluctuated significantly, reaching a high of 22 billion board feet in 2005 before dropping sharply during the recession and recovering only to 12 billion board feet in 2024.
Challenges in Boosting Domestic Production
Researchers studying the forestry sector suggest that replacing Canadian imports with domestic lumber involves complex challenges beyond tariff barriers. According to their analysis, differences in tree species and quality mean U.S. lumber often comes at higher cost, even with tariffs on imports. Southern yellow pine, abundant in the southern U.S., is reportedly less preferred for framing than Canadian spruce, northern pines and fir because it’s heavier and more prone to warping.
Sources indicate that lumber from Idaho, eastern Oregon and eastern Washington shares characteristics with Canadian species and could potentially replace some imports. However, analysts suggest limited labor and manufacturing capacity require long-term investments that temporary tariffs and uncertain trade policies often fail to encourage.
Congressional Research Service analysis indicates that while the U.S. has substantial potential lumber available, particularly in the South where harvestable inventory has grown significantly, the types of wood available aren’t always interchangeable with Canadian imports. Southern yellow pine is more commonly used for utility poles and preservative-treated lumber for outdoor projects like decks, according to industry reports.
Economic Implications and Affordability Concerns
The report states that both domestic and imported lumber prices can influence overall home construction costs, which in turn affects housing affordability. However, analysts note that lumber used for framing typically accounts for less than 10% of total costs to build a new home, suggesting the effects of tariffs on new home construction may be significantly less than other factors like rising labor costs.
Price data shows Canadian lumber has historically averaged about $330 per thousand board feet, but during and after the COVID-19 pandemic, import prices soared to almost $800 before dropping to $436 by 2024. Researchers suggest the amount of lumber imported tends to mirror the boom-and-bust cycles of housing construction – a dynamic that tariffs alone are unlikely to change.
According to trade policy analysis, the effectiveness of tariffs in stimulating long-term domestic investment remains uncertain. While the administration aims to boost U.S. logging, market participants will reportedly be looking not only at where lumber originates, but what it costs and what type best suits their construction needs.
Industry experts cited in a University of Tennessee study suggest that sustainable development of domestic forestry resources requires addressing fundamental constraints beyond trade policy, including workforce development, manufacturing modernization, and balancing environmental considerations with production goals.
This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.
