Tariffs on Canadian timber have boosted U.S. production while British Columbia cities suffer. Now Trump Tariffs Loom

As many Canadian businesses look anxiously at what Donald Trump’s presidency (and his promise to raise tariffs on imported goods) could mean for their bottom lines, those in British Columbia’s timber industry are already feeling the effects: lost jobs, devastated cities . and an uncertain future.

Although Donald Trump has promised a 10 percent tariff on goods imported into the United States, Canadian softwood lumber sold in America has already been hit by tariffs that have doubled during Joe Biden’s presidency and are projected to double again in 2025.

Meanwhile, production of the same product in the United States has grown, bringing with it new jobs and investment—sometimes financed by the same companies that are closing up shop in Canada.

For example, Canfor, headquartered in Vancouver, recently conducted The US is buying new businesses in the amount of $73 million Arkansas, citing access to “high-quality, globally competitive timber.” The deal closed in August, the same month the U.S. Commerce Department announced it would nearly double the import tariff on Canadian softwood lumber from 8.05 percent to 14.54 percent.

A few weeks later, Canfor said it was closing plants in Vanderhoof and Fort St. John, British Columbia, blaming it in part on “punitive” tariff increases.

Overall, hundreds of British Columbia workers have either lost or will lose their jobs by the end of the year, dealing a major blow to the communities they support.

Trade dispute dating back to Ronald Reagan

Softwood is the term used to refer to planks made from softwood trees, such as spruce and pine, which are generally more flexible than hardwoods and are used in the construction of homes and buildings.

In Canada, the bulk of softwood exports go to the United States, representing more than half the market for a $10-billion-plus industry largely concentrated in British Columbia.

However, jobs in the province have disappeared in recent years due to a variety of factors, including dwindling timber supplies due to the mountain pine beetle epidemic and wildfires. Also in focus are protectionist measures taken by the United States that make it difficult for Canadian-produced softwoods to be sold across the border.

This risk has not gone unnoticed by British Columbia policymakers and politicians.

“America is BC’s largest trading partner and our closest international ally,” provincial Conservative Leader Jon Rustad wrote in a post on X congratulating Trump on his victory this week. “British Columbia’s number one priority must now be to push America to make progress on ending punitive tariffs on softwood lumber.”

“Timber is our largest export,” said Laura Jones, CEO of the Business Council of British Columbia. And while tariffs could be a problem for most industries, she said the impact on softwood lumber is “almost in a different league… the situation could get worse.” , if one could imagine that it would be even worse.”

British Columbia’s ruling party, the NDP, has also called the U.S. tariffs “punitive” and has repeatedly called for their removal.

But they are popular among producers in the United States, and the U.S. Timber Coalition says their introduction “confirms that Canada continues to subsidize and dump its softwood lumber into the United States.”

The argument, coming south of the border since the 1980s, is that the pricing system used in Canada is unfair. In places like British Columbia, the government imposes so-called stump fees on timber harvested on publicly owned Crown lands.

For producers in the United States, this amounts to a subsidy compared to the market rates they must pay.

The two countries have entered into long-term agreements from time to time, most recently the 2006 Softwood Lumber Agreement, which expired in 2015 and has not been successfully renegotiated.

Since then, new tariffs have been introduced both under Trump in his first term as US president and under Joe Biden, who was in office during the latest hikes.

At the same time, softwood production declined in British Columbia while it increased sharply in the United States. Fastmarkets Industry Analysis Group reports US softwood production is approaching its highest level since 2005. and is on track to surpass Canadian production for the first time since the 1970s. according to a Bloomberg report.

And British Columbia companies are following the trend: Both Vancouver-headquartered Canfor and West Fraser now operate more plants in the United States than in Canada as they close or reduce production at home.

Although this is a blow to British Columbia, companies in the United States are hailing it as a victory: “U.S. workers processing more lumber from American trees to build American homes also creates more American jobs… in the typically rural communities that support those workers.” reports the Forestry Coalition.

Russ Taylor, a Vancouver-based analyst, says U.S. softwood tariffs imposed on Canada are expected to rise to about 30 percent next August, and Trump’s 10 percent tariff on top of that would be “extremely prohibitive.” for British Columbia. manufacturers.

“If you’re an American company, you’re doing well, good for us, very good for us,” Taylor said, even as it devastates similar rural communities in British Columbia.

Tough Transition: Analyst

He said Canada has some allies in the United States, most notably the National Association of Home Builders, which argues that tariffs negatively affects housing prices in the United States.

But while the group wants a new softwood deal, it also wants the United States to “reduce our country’s dependence on Canadian lumber imports” and look to other countries to help make up the difference, which could hurt British Columbia even without the tariffs.

Taylor says that while British Columbia and Canada have at times attempted to diversify their lumber export markets to include Asia and Europe, they remain heavily dependent on the United States, and that is unlikely to change with current market trends.

Trying to use more wood in Canada, he said, will also be a challenge because the Canadian lumber market can only absorb about one-third of what the country currently produces.

“Our plants are designed for the United States,” he said. “It’s not an easy transition.”