On October 14, 2025, a new chapter unfolded in the long-standing trade dispute between the United States and Canada as U.S. President Donald Trump enacted sweeping tariffs on imported lumber and wood products. The move, which has already sent shockwaves through the Canadian forestry sector and rattled cross-border economic ties, saw a 10 percent duty slapped on softwood lumber and a 25 percent tariff imposed on finished wood goods, including kitchen cabinets and bathroom vanities. These tariffs are set to climb even higher at the start of the new year, escalating an already tense economic standoff.
For Canadian producers, the timing couldn’t be worse. According to Global News, Canadian softwood lumber was already burdened with anti-dumping and countervailing duties totaling just over 35 percent before the new measures. With the additional 10 percent tariff now in effect, total import taxes on Canadian softwood lumber entering the U.S. exceed a staggering 45 percent. The pain doesn’t stop there: the 25 percent tariff on kitchen cabinets and vanities is scheduled to double to 50 percent in January 2026, while tariffs on other upholstered wooden products will rise to 30 percent at the same time.
The impact is particularly acute for Canada, which supplies a whopping 75 percent of all softwood lumber imported into the United States, as highlighted by RBC economist Claire Fan in an analysis cited by Global News. Softwood lumber products hit by the new 10 percent tariff account for 1.3 percent of all Canadian exports to the U.S., and one-fifth of all kitchen cabinets made in Canada were exported south of the border before the tariffs took effect. In a twist that has further stoked Canadian frustrations, the new tariffs mean Canada now faces a higher duty on kitchen cabinets than European Union countries, who pay a flat 15 percent under a separate trade deal negotiated by Trump.
The White House has defended the tariffs as necessary to protect American economic interests and bolster domestic manufacturing. According to a report by U.S. Commerce Secretary Howard Lutnick, Trump claimed that wood products were being imported into the U.S. "in such quantities and under such circumstances as to threaten to impair the national security of the United States." The administration’s stance is that these measures are justified to level the playing field for American producers and to address what it sees as unfair trade practices by Canada.
The U.S.-Canada lumber dispute, it should be noted, is nothing new. The two countries have been locked in a decades-long battle over American allegations that Canada unfairly subsidizes its lumber industry and sells timber below market rates, a practice known as dumping. The U.S. Commerce Department announced plans just last month to nearly triple duties on Canadian softwood lumber to just over 20 percent, a move that set the stage for the even broader tariffs announced by Trump.
But for many in Canada, the new tariffs are not just business as usual—they are a direct threat to livelihoods and local economies. The Forest Products Association of Canada (FPAC) did not mince words in its response, expressing "extreme frustration and deep concern" about the latest U.S. actions. The association warned that the tariffs endanger the jobs of 200,000 Canadians connected to the industry and "the stability of hundreds of towns and cities that rely on a strong forest sector." FPAC president and CEO Derek Nighbor, in a statement quoted by Global News, called the tariffs "punitive, protectionist measures with no basis in fact. They ignore decades of evidence that Canadian lumber strengthens, rather than threatens, U.S. national security and economic resilience."
The sentiment was echoed by the British Columbia Lumber Trade Council, which described the new tariffs as "misguided and unnecessary." The Canadian Forest Product Sector, for its part, argued that the move was "unjustified and disregards decades of evidence and cooperation that confirm Canadian forest products strengthen, rather than threaten, U.S. national security."
Economists, too, have weighed in on the potential fallout. While the tariffs are global in scope, experts say they will disproportionately impact Canada due to its dominant share of the U.S. softwood lumber market. The new duties come at a time when the North American construction industry is already grappling with supply chain challenges and rising costs. With 75 percent of softwood lumber imports to the U.S. coming from Canada, analysts warn that higher tariffs could drive up prices for American homebuilders and consumers, potentially slowing new construction and renovation projects.
Some observers also point out that the tariffs could have unintended consequences for U.S. businesses. The 25 percent tariff on kitchen cabinets and vanities, for example, means higher costs for American importers and, ultimately, consumers. And as the duties are set to increase even further in January—reaching 50 percent on kitchen cabinets and 30 percent on other upholstered wooden goods—the financial strain on both sides of the border is likely to intensify.
For Canadian exporters, the new reality is grim. The U.S. has long been the most important market for Canadian forest products, and the sector’s fortunes are closely tied to cross-border trade. The additional tariffs come on top of years of uncertainty and legal wrangling, further complicating efforts to reach a long-term settlement to the lumber dispute. As the tariffs bite, industry groups and government officials alike are scrambling to assess the full impact and explore potential avenues for relief.
Despite the tough rhetoric from the Trump administration, many in Canada remain hopeful that cooler heads will eventually prevail. There is a shared recognition that the two countries’ economies are deeply intertwined, especially in sectors like forestry where supply chains and markets cross borders seamlessly. For now, though, the mood is one of frustration and anxiety as communities brace for the fallout from a trade war that shows no signs of abating.
Looking ahead, all eyes are on the January 2026 deadline, when tariffs are set to rise yet again. The stakes are high not just for the Canadian forestry sector, but for American businesses and consumers as well. As the dispute drags on, the hope is that dialogue and negotiation—not escalating tariffs—will ultimately chart the path forward.
