A new outlook report, Softwood Lumber - Tariffs, Turbulence and New Trade Flows to 2030, provides a data-driven assessment of how the United States, Canada, and Europe are reshaping global softwood lumber markets.
The findings point to a decade defined by structural supply constraints, shifting trade routes, and rising pressure on producers, policymakers, and downstream users.
United States: A Persistent Structural Supply Deficit
The US has never produced enough softwood lumber to meet its own consumption needs, and that deficit is expected to persist through 2030. Housing construction and residential remodeling account for nearly all US lumber use, making demand highly sensitive to interest rates, affordability, and labor availability. While the US represents 27% of global demand, it produces only 20% of global supply, requiring substantial imports to bridge the gap.
For five decades, imported lumber has accounted for 25-33% of US consumption. Canada supplies roughly 80% of these volumes, with European shipments filling much of the remainder. In 2025, foreign producers are projected to meet nearly 30% of US softwood needs, close to the highest level in almost 20 years.
Market realities do not support claims that the US can achieve self-sufficiency. Replacing today’s 25 million m³ of annual imports would require around 75 new sawmills, far exceeding recent investment trends. Even if capital were available, expansion would be limited by regional timber availability, workforce shortages, permitting delays, and delivered-cost disadvantages versus imported wood.
Near-term US demand remains uncertain after declines in 2022-24, but long-term housing needs point to renewed growth late in the decade. New US tariffs taking effect in October 2025 are expected to reduce Canadian shipments and increase price volatility.
Canada: Export Dependence Meets Declining Timber Supply
Canada remains the world’s leading lumber exporter, with 65% of production sold abroad and almost 90% going to the United States. This dependence makes Canada highly exposed to shifts in US trade policy. New tariffs and higher AD/CVD duty rates in 2025 increase Canadian lumber costs by 25-30%, eroding competitiveness.
Timber supply constraints pose an even larger challenge. In British Columbia, historically a cornerstone of Canada’s industry, the allowable annual cut has fallen by one-third over the past 20 years. Harvest levels have dropped by half due to wildfire losses, insect infestations, Indigenous land settlements, and new conservation requirements. Log costs have risen, pushing many sawmills into negative margins and accelerating capacity closures.
Although Canada aims to diversify into Asian, European, and Middle Eastern markets, volumes outside the US are at near-record lows. Diversification is expected to increase slowly but will not replace lost US market access in the near term.
Europe: A Growing Global Supplier Amid Tightening Log Supply
Europe accounts for one-third of global softwood production and roughly one-quarter of net exports. Output has grown modestly over the past two decades, outpacing domestic demand and enabling rising overseas shipments, particularly to the US and the MENA region.
European demand weakened in 2022-24 due to high interest rates, but is expected to gradually recover. However, long-term supply constraints are emerging. The Central European bark beetle outbreak led to large salvage volumes through 2021, but with that wave now over, harvest levels are falling. Central Europe is projected to experience a net reduction in softwood log supply through 2030.
Future growth will depend on Northern and Eastern Europe, where harvest potential remains higher. Overall, Europe can expand sawlog supply by 15-20 million m³ by 2030, but export growth will be limited by rising internal demand and tighter fiber availability.
Conclusion
Across the US, Canada, and Europe, the report identifies a common trend: global softwood lumber markets are entering a period of structural tightness. The US will remain importdependent, Canada faces long-term constraints, and Europe will play a larger, but increasingly capacity-limited, role in global supply. These factors will shape trade flows and pricing throughout the decade.
For more information about the new market report or to order, please visit:
• https://www.okelly.se/shop/lumber2025
About the Authors
Håkan Ekström
Mr. Ekström is a leading expert on international forest products markets, with more than 35 years of experience in wood products utilization, international marketing, wood supply and demand analysis, and price forecasting. He has conducted on-site industry assessments in over 25 countries and currently leads Global Wood Trends, a Seattle-based consultancy specializing in international forest industry analysis.
Previously, he served as an international forest products analyst with ResourceWise and spent 30 years as president of Wood Resources International (WRI), an internationally recognized firm founded in 1987. WRI also produced two prominent quarterly wood market price reports that tracked global wood prices for over 35 years.
Global Wood Trends (United States)
Håkan Ekström | 📧
Glen O’Kelly
Glen is the owner and director of O’Kelly Acumen, based in Stockholm, Sweden. He has worked with the forest industries globally for 25 years, across the full value chain from forestry to wood products, pulp and paper, and bioenergy – on topics ranging from markets, strategy, procurement, and manufacturing. His experience includes forest management roles in New Zealand and Sweden, and business consulting with McKinsey & Company for 17 years where he served executive-level clients in leading forestry and forest products companies globally. For many years, he led McKinsey’s global Paper & Forest Products research and expert team. Since 2021, Glen has led O’Kelly Acumen, a business providing distinctive market intelligence and consulting services to clients worldwide.
O’Kelly Acumen (Sweden) — www.okelly.se
Glen O’Kelly | 📞 +46 73 56 98 039 | 📧
