US Cuts Canadian Softwood Duties to 24.75%; Total Tariff 34.75%

US Department of Commerce Adjusts Canadian Softwood Tariffs

The US Department of Commerce has reduced the combined duty on most Canadian softwood lumber to 24.75% from its previous rate of 35.16%. This adjustment, effective from 21 October 2026, impacts over 200 Canadian lumber producers and exporters shipping into the United States.

Despite this reduction, a separate 10% Section 232 tariff remains in place, bringing the overall import tax on Canadian softwood lumber to 34.75%. The Commerce Department's seventh annual review saw the dumping duty fall to 10.64% from 20.53%, while the subsidy duty was trimmed to 14.11% from 14.63%, resulting in the new combined rate.

Individual Company Rates and Industry Commentary

In its review, the US Department of Commerce individually examined several Canadian producers. Canfor faces a dumping duty of 17%, a decrease from 35.47% in the prior year. West Fraser's rate is set at 4.71%, while Resolute's is 13.13%. Other producers and exporters, including Interfor and Weyerhaeuser, will pay the combined rate of 24.75%.

Kim Haakstad, interim president of the BC Lumber Trade Council, stated on Wednesday that Canadian softwood still faces import taxes of 34.75% once the 10% Section 232 tariff is factored in. Zoltan van Heyningen, executive director of the US Lumber Coalition, commented that the Commerce Department has reaffirmed Canada's continued unfair trade practices in softwood lumber.

Calls for Tariff Pause Amidst Market Impact

The National Association of Home Builders (NAHB) has advocated for the US administration to pause tariffs on all building materials, including Canadian lumber, and to swiftly negotiate a new softwood lumber agreement. The NAHB argues that these lumber tariffs increase housing costs, effectively imposing a tax on American builders, home buyers, and consumers.

The 10% Section 232 tariff on softwood timber and lumber was initially imposed on all countries a year ago, though hardwood timber and lumber were excluded. The Commerce Department was also tasked with updating the administration on hardwood imports by the start of this month to assess the need for a phased duty recommended last year.

Global Market Implications for Timber Sourcing

The sustained high total import tax of 34.75% on Canadian softwood lumber in the US market, despite the duty reduction, will likely prompt US importers to continue exploring alternative sourcing options. This persistent tariff pressure could increase demand for softwood lumber from other global suppliers, potentially benefiting timber exporters in Asia.

Asian manufacturers and suppliers of structural timber and panel products, particularly those in markets like Vietnam or Malaysia, should prepare for increased inquiries from US buyers seeking to diversify their supply chains.

Specifically, Asian suppliers could offer alternative timber species or higher volumes to meet a potential shift in US procurement patterns away from heavily-tariffed Canadian stock in 2027.