Forestry
UnsettledSoftwood lumber, pulp and paper, and wood products. The softwood lumber dispute predates the current trade war by decades.
Softwood lumber faces a triple stack: the 2025 administrative review raised CVD/AD duties from ~14.54% to 35.16%, a 10% Section 232 timber tariff was added in October 2025, and the 10% global tariff applies to non-CUSMA goods. Combined effective burden for most producers exceeds 45%. A preliminary April 2026 review proposed reduction to ~24.83%, pending final determination. Canada has multiple WTO and CUSMA legal challenges active.
Baseline
Measures that existed before the 2025 trade escalation.
Softwood Lumber CVD/AD Duties (Pre-2025 Baseline)
BaselineCVD/AD duties on Canadian softwood lumber have existed in various forms since the 1980s. Rates fluctuated through periodic administrative reviews. By late 2024, the broad 'all others' combined rate was approximately 14.54%.
In Force
Measures currently active since the 2025 escalation.
Softwood Lumber CVD/AD — 2025 Rate Increase to 35.16%
In ForceThe 2025 administrative review sharply increased combined CVD/AD duties from ~14.54% to 35.16% for most producers. An 8th administrative review (April 2026) proposed a preliminary reduction to ~24.83%, but final determination is still pending as of August 2026.
Section 232 Tariff on Timber and Softwood Lumber (10%)
In ForceStacks on top of the existing CVD/AD duties. Combined effective burden for most producers exceeds 45%. Cabinets and vanities face 50% rate from January 2026.
10% Global Tariff on Non-CUSMA Goods
In ForceReplaced the IEEPA 25%/10% tariffs struck down by the Supreme Court in February 2026. Lower rate but broader legal footing. Businesses that paid IEEPA tariffs between Feb 2025 and Feb 2026 became eligible for refunds.
Section 301 Tariff — Forced Labor Enforcement (10%)
In ForceApplied to 60 countries, not Canada-specific. USTR determined Canada has not effectively enforced its forced labor import prohibition. Stacks on top of other tariffs for non-CUSMA goods. Energy products have major exemptions.
Forecast
Threatened, announced, or scheduled — not yet in force.
CUSMA/USMCA Joint Review — U.S. Declines to Extend
Under NegotiationOn July 1, 2026, the U.S. declined to confirm extension. Agreement remains fully in force but faces annual review. Canada has not yet begun substantive text-based negotiations with the U.S. This creates structural uncertainty for all cross-border trade.
Canadian Response
Actions Canada has taken or is pursuing.
CUSMA/WTO Legal Challenges on Softwood Lumber Duties
Canada has filed disputes through WTO, CUSMA Chapter 10, NAFTA Chapter 19, and the U.S. Court of International Trade challenging countervailing and anti-dumping duties on softwood lumber.
Latest News
Canadian counter-tariffs scheduled for September 8 include 25% duties on U.S. toilet paper and several tissue products, while some facial-tissue stock and school or office paper products face 50%. Canadian importers now have to assess landed costs and alternative suppliers across an integrated North American paper market.
RBC, TD, and CIBC reported third-quarter profits above analyst estimates. RBC CEO Dave McKay said more than 80% of Canadian exports remain duty-free and the average effective tariff rate is approximately 6%. TD said it holds about C$500 million in reserves for policy and trade risks.
Oxford Economics estimates the latest U.S. tariff escalation and Canadian counter-tariffs could leave Canada's real GDP 0.3 percentage points below its August baseline in 2027 and lift consumer prices by 0.3 percentage points. The forecast is an estimate, not an observed result.
Canada's real GDP grew 0.8% in the second quarter of 2026, equivalent to a 3.3% annualized rate and the strongest quarterly expansion since 2023. Final domestic demand rose 1.0%, June GDP increased 0.3%, and Statistics Canada's preliminary estimate indicated little change in July.
USTR imposed a 10% tariff on Canadian goods under Section 301, citing failure to enforce forced labor import prohibitions. Not Canada-specific — 60 countries affected. USMCA-compliant goods are exempt.
At the mandatory six-year joint review, the U.S. declined to confirm a 16-year extension of CUSMA/USMCA. The agreement remains in force but faces annual reviews until 2036. Canada has not begun substantive text-based negotiations with the U.S.
The Supreme Court held that IEEPA does not authorize the President to impose tariffs, invalidating the legal basis for the 25–35% broad tariffs on Canadian goods that had been in force since February 2025. CBP stopped collecting IEEPA tariffs on February 24. Importers became eligible for refunds.
Canada filed CUSMA Chapter 10 challenges against U.S. anti-dumping (Aug 28) and countervailing (Sept 11) duties on softwood lumber. Multiple legal venues being pursued simultaneously including WTO, NAFTA Chapter 19, and U.S. Court of International Trade.
The 2025 administrative review sharply increased combined CVD/AD duties on Canadian softwood lumber from 8.05% to 35.16% for most producers. Canfor faces 47.59%. These rates stack on top of the separate 10% Section 232 timber tariff.
Consumer Impact
Related product categories and price pressure.