The U.S. has nearly doubled its tax on softwood lumber imports from Canada, in a move that the federal minister of international trade is calling “baseless and unfair.”
What happened: At the heart of the issue are so-called stumpage fees for timber harvested from government-owned lands. When these fees are below market rates, it effectively lowers the cost of materials for loggers and gives them an advantage over international competitors.
- It’s a system that one U.S. industry group sees as distorting the prices in the softwood lumber market, as mills across the country “are struggling to keep afloat.”
Big picture: Analysis shows that Canada ends up with “de facto subsidization” due to the nature of land ownership: while the U.S. sets its stumpage fees through competitive bidding on public land, Canadian provinces set fees based on a formula, leading to lower prices.
Bottom line: The countries could put their decades-long feud over softwood lumber to bed in the 2026 review of the Canada-United States-Mexico Agreement. Solutions on the table include an collaborative approach to tariffs or aligning pricing systems more closely.—SB