Canada has shifted its approach in the long-running softwood lumber dispute with the United States.
Ottawa has withdrawn certain legal challenges against U.S. duties, choosing instead to concentrate efforts on reaching a broader negotiated settlement. The move reflects a strategic pivot aimed at securing long-term stability for a sector that has faced trade friction for more than four decades.
Tariffs Increase Sharply
In the summer of 2025, the U.S. Department of Commerce imposed significant increases to trade remedies. Countervailing duties rose from 6.74% to 14.63%, while anti-dumping duties jumped from 7.66% to 20.56%. Together, these measures have pushed the average tariff burden on Canadian softwood exports to roughly 35%. Further hikes are possible, with Washington also launching a Section 232 investigation under the Trade Expansion Act to assess whether Canadian lumber imports pose a national security risk.
Federal Support for the Industry
In response, Ottawa unveiled a C$1.2-billion support package in early August. The plan includes C$700 million in loan guarantees to ease financial pressure on mills and C$500 million to encourage product diversification, value-added investments, and new market development. Additional measures are being designed to support Indigenous-owned forestry enterprises.
Calls for Stability
British Columbia, the province most dependent on U.S. lumber exports, has emphasized the strain that tariff uncertainty places on both industry and communities. Stakeholders argue that a durable, negotiated agreement remains essential to safeguard competitiveness and economic security in forest-reliant regions.
