It’s fair to say many in the forest supply chain will be happy to see the back of 2025. All through the year, Wood Central has reported on an industry under pressure — a level of strain that producers across three continents have described as a perfect storm. Tariffs, creeping costs and policy uncertainty have unsettled markets in North America, Europe and Russia, while slowing timber flows into the Asia‑Pacific region.
In North America — and increasingly worldwide — traders spent much of the year navigating Donald Trump’s on‑again, off‑again tariff regime. Combined with the latest U.S. Department of Commerce review of Canadian softwood duties, the measures pushed anti‑dumping and countervailing rates on U.S.-bound lumber above 30 per cent for large volumes of cross‑border trade.
The pressure ratcheted up further in mid‑September, when a Section 232 national‑security probe added a further 10 per cent tariff on imported timber and lumber and 25 per cent on wooden furniture and cabinets. From tomorrow, those rates climb even higher for some categories, with upholstered wooden furniture rising to 30 per cent and kitchen cabinets and vanities jumping to 50 per cent. For many exporters, the combined duties now approach — or exceed — the retail value of the products they ship into the world’s largest consumer market.
Already, the National Association of Home Builders has warned that these measures were “adding thousands of dollars to the cost of a typical newly built home,” estimating at least US$10,000 in additional cost for a single‑family dwelling. And despite the tariff threats — and promises to boost harvesting in U.S. federal forests — Canada still holds the trump card when it comes to lumber, supplying more than one‑third of the United States’ softwood needs.
Lumber prices fell despite the tariffs
Lumber futures fell to US$526 per thousand board feet in early September — down 24 per cent from August highs — before stabilising around US$543 by year‑end. Housing starts and building permits remained well below 2024 levels, signalling persistent weakness in demand.
And producers on both sides of the U.S.–Canada border responded by cutting capacity. Canfor permanently closed its Estill and Darlington mills in South Carolina, removing 350 million board feet of annual output. West Fraser shuttered its Augusta, Georgia, mill and its long‑running operation at 100 Mile House in British Columbia, while Domtar Wood Products reduced fourth‑quarter production by 100 million board feet.
These closures highlight a paradox: even as tariffs are justified as protection for domestic industry, weaker demand, policy uncertainty and rising costs are forcing North American producers to pull back.
Across the Atlantic, Europe’s sawmills are also under pressure. In Sweden, Södra and Vida halted production in February as timber shortages and record log prices eroded margins. Vida reported sawlog prices had risen roughly 50 per cent year‑on‑year, prompting a one‑week shutdown across all 12 of its mills, while Södra introduced intermittent stoppages to manage costs. By May, Holmen had cut output and staffing at its Braviken sawmill, citing declining profitability and difficulty sourcing competitively priced logs.
And as the year progressed, the collapse of by‑product revenues — particularly pulpwood chips and energy commodities — removed a critical earnings buffer for Nordic mills. According to Handelsbanken’s December Forestry Report, chips that once sold at healthy margins into pulp and bioenergy markets now fetch far lower prices, leaving sawmills fully exposed to record timber costs.
And then there was the EUDR
Regulatory uncertainty compounded the strain. After months of industry resistance, the European Commission confirmed that enforcement of the EU Deforestation Regulation — designed to keep products linked to recent forest clearing out of the EU market — would be postponed for an extra 12 months.
Announced earlier this month after protracted negotiations, Brussels acknowledged that operators needed “greater clarity and practical guidance” before the full rollout of the world’s most ambitious deforestation law. Member states and industry groups had long warned that its traceability and reporting requirements were unworkable — particularly for small and medium‑sized enterprises and for complex, multi‑country supply chains.
For many European producers, 2025 became a year of waiting: curbing output, deferring investment and hoping for clearer signals from both markets and regulators. Meanwhile, further east, Russia’s forest industry — once responsible for about 7 per cent of the world’s sawn‑wood production — slid deeper into decline. Sanctions, high financing costs, and the loss of Western markets have sharply reduced export opportunities, while China — long viewed as the natural outlet for displaced Russian volumes — has not absorbed enough to offset the fall.
Inside Russia, lumber, plywood and panel production stagnated as China’s construction slowdown rippled through supply chains. Rising borrowing costs — driven by the Bank of Russia’s 16 per cent key rate — and a stronger ruble further eroded competitiveness. Rail and energy tariffs rose faster than inflation, while forest lease fees were recalculated retroactively, lifting costs by more than 70 per cent on long‑term contracts.
The result is a cost structure that is now globally uncompetitive. Wood costs for Russian pulp producers reached US$160–190 per tonne, compared with US$120–130 in Brazil and US$150–160 in Chile. Shipping pulp from South America to China is now cheaper than shipping from Russia. A lack of domestic machinery manufacturing continues to limit modernisation.
The year ends with mills closed, investments deferred and workers from the American South to Småland to Siberia bearing the consequences. For now, the outlook remains uncertain. But what is clear is that 2025 has left the global forest‑products industry facing another year of uncertainty — and little room for error.
