Canadian timber and lumber have escaped the 50 per cent tariff Donald Trump slapped on US$20 billion of Canadian goods this week, with wood products named among the exclusions as the US President reached for a 96-year-old trade law never used before. That is according to the White House fact sheet accompanying three proclamations signed on Monday under Section 338 of the Tariff Act of 1930, which lets a president tax any country found to be discriminating against American goods at up to 50 per cent without asking Congress.
Signed in response to what the White House calls Canada’s discriminatory treatment of American cars, alcohol, and dairy, the proclamations cover goods from wine to hockey sticks to cement, and apply even where products qualify under the US-Mexico-Canada Agreement. The tariffs take effect from midnight eastern time on 19 August, with analysis published by Axios putting the covered imports at $20 billion under a provision no administration had touched since Congress wrote the Smoot-Hawley act in 1930.
“This trade dispute has raised costs for families, particularly in the US,” Prime Minister Mark Carney said, describing the move in a statement as the latest in a run of one-sided American trade actions that violate the two countries’ free trade agreements. Canada stands ready to engage intensively with Washington, Carney said, as politicians at home pressed Ottawa to answer the 50 per cent in kind.
The carve-out for wood is written into the operative text, with each proclamation stating the duties shall not apply to articles already subject to Section 232, the measures that put 10 per cent on timber and lumber last October and 25 per cent on upholstered wooden furniture, kitchen cabinets, and vanities. Timber and lumber appear on the White House’s own list of Section 232 actions in the same fact sheet, with trade-law analysis of the proclamations also naming wood products, semiconductors, and pharmaceuticals among the exclusions.
Far from relief, the exclusion leaves Canadian softwood locked inside its own border arithmetic, paying a 20.56 per cent antidumping duty and a 14.63 per cent countervailing duty on top of the Section 232 tariff. Commerce has already moved to cut those duties to a combined 24.83 per cent at the preliminary stage, with the final call due next month and Canfor, Resolute, and West Fraser among the producers whose 2024 trading records will shape it.
It comes as the US Lumber Coalition spent the same news cycle defending the existing duties and tariffs lumber carries, publishing a statement on Monday that answered Ontario Premier Doug Ford’s call for the United States to “open its gates” to Canadian lumber. Trade enforcement and the Section 232 tariff, the Coalition claims, have cut Canada’s share of the American lumber market from 35 per cent to an average of 19 per cent.
“Canada should be dismantling that excess capacity in a responsible manner,” Zoltan van Heyningen, the Coalition’s executive director, said, urging Trump to hold tariffs and duties at levels he argues will sustain the expansion of American lumber manufacturing rather than absorb Canada’s subsidised surplus.
Home builders want building materials removed entirely from the tariff lists, with the National Association of Home Builders estimating that combined duties and tariffs have added at least $10,000 to the cost of a new American home. Framing lumber prices have surged more than 30 per cent off December lows as Canadian shipments thinned, and softwood imports fell 28 per cent in the year to January.
Ottawa had already put lumber on the table before Monday’s escalation, with Dominic LeBlanc, the minister responsible for Canada-US trade, naming softwood alongside steel, aluminium, and autos as the files to resolve when he carried the demand into the fifth CUSMA joint review on 1 July. Canadian producers supply 75 per cent of the softwood that the United States imports, a dependence that leaves them most exposed whenever Washington moves.
Courts are the reason the statutes keep changing, with the Supreme Court striking down Trump’s emergency-powers tariffs in February and the White House answering with a 10 per cent global levy under Section 122, a second dormant trade authority. The signings followed within days of Trump’s threat to tax Canada over wildfire smoke drifting into American cities, although none of the three names mentioned smoke.
Washington has now stacked two deadlines into August, with the 50 per cent tariffs starting on 19 August and Commerce due to deliver its final softwood duty numbers in the same month. According to Karl Schamotta, chief market strategist at Corpay, the Section 338 measures alone will raise the average tariff rate on Canadian goods by 2.3 percentage points.
