More Than Hockey Sticks – Section 338 50% Tariffs

An Editorial Opinion – Right From The Stump, August 11, 2026

Effective August 19^th, the United States will apply new US tariffs of 50% on a range of British Columbia forest products exports to the US, affecting nearly $1 billion. The tariffs result from Section 338 investigations launched in response to White House allegations that Canada engages in unfair trade practices related to motor vehicles, alcoholic beverages and dairy products.

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The unanticipated US response was the imposition of new 50% tariffs, under Section 338 of the US Tariff Act of 1930, targeting Canada across a diverse list of products including, as media reports noted, hockey sticks. While initial news coverage tended to make light of the trade action likely because of the likely symbolic inclusion of hockey sticks (Canada exported $37 million worth of hockey sticks to the US in 2025), the implications for British Columbia’s already beleaguered forest products sector are far more serious

Based on my interpretation of the 103 Harmonized Tariff Schedule of the United States (HTSUS) forest product descriptions listed in White House annexes (I-2, I-3) accompanying the proclamations, I estimate that BC exported up to approximately $991 million of forest products potentially subject to Section 338 tariffs to the US in 2025.

A significant caveat applies to this estimated value. Mapping the product descriptions contained in the White House annexes to Canada's Harmonized System (HS) export codes is not a straightforward exercise. In some cases, the HTSUS product descriptions do not align precisely with Canadian export classifications. As a result, certain Canadian export categories may capture products beyond those specifically targeted by the Section 338 tariffs, meaning the export values presented here should be viewed as estimates rather than definitive measures of exposure.

Grouping the 103 products provides a useful snapshot of which manufacturing segments within the BC forest product sector are likely to be affected most:

Veneer is the highest-value forest product on the list based on 2025 exports to the US. This impact will be significant for manufacturers on both the Coast and in the Interior.

Canadian plywood represents the second-highest export group that would be affected by the tariff, although most Canadian plywood is consumed domestically. Nonetheless, the US remains an important market. Approximately $145 million of plywood exports in 2025 consisted of coniferous plywood typically used in construction. The remaining exports within this group use hardwood and tropical woods as outer layers, although may still incorporate coniferous species veneer in their core layers.

Select paper and packaging products rank as the third-largest affected group, with $123 million in exports to the US. This could affect paper mills but also paper product converters.

LVL (laminated veneer lumber) follows with exports totalling $84 million.

Clearly, the impacts of these new tariffs extend well beyond hockey sticks and are likely to be felt across a broad range of forest manufacturing segments. Major producers of veneer, LVL, plywood, MDF, paper products and furniture could be affected directly. However, the impacts may be felt further down the value chain. Many of these producers supply secondary and tertiary manufacturers that further process these products into higher-value goods.

One of the most striking aspects of the Section 338 tariff list in the number of products commonly considered “value-added wood products”. That’s a tough setback to BC government’s long-standing objective of getting more value from every tree harvested. That objective becomes much harder to achieve when many of those products are suddenly facing a 50% tariff.

Promoting value-added wood manufacturing in BC has long been viewed as a strategy to reduce dependence on commodity lumber markets and lessen exposure to the ongoing softwood lumber dispute and associated duties. With many value-added products being hit square on with a 50% Section 338 tariff, that strategy has been dealt a serious blow.

What alternatives exist for products that would otherwise face a 50% tariff? The prospects for absorbing significant additional volume within Canada appear limited. Canadian housing starts have been decreasing, despite Prime Minister Carney’s stated objective to double housing starts over the next five years. 

Seeking opportunities in non-US international markets is another option, but developing sales in foreign markets takes time. The agencies and sales groups tasked with international business development beyond the US will now be under even greater pressure to deliver tangible results.

FOREST PRODUCT TARIFFS & DUTIES: Determining which US duties and tariffs applied to Canadian forest products has become increasingly complex. One major difference from previous tariff threats over the past couple of years is that the new Section 338 tariffs apply to CUSMA-compliant products, that would otherwise qualify for tariff-free access to the US market.

Products already covered by Section 232 are exempt from the new Section 338 measures. This includes Canadian logs and softwood lumber, which are currently subject to a 10% Section 232 tariff as well as upholstered furniture and kitchen cabinets and vanities, which currently face a 25% tariff that is scheduled to increase on January 1, 2027.

There are also products that are not covered by Section 232 tariffs but are subject to softwood lumber antidumping (AD) and countervailing (CVD) duties, and which may also be captured by Section 338 tariffs, resulting in a potentially devastating cumulative burden.

As if all these tariffs and duties were not enough, the United States announced another tariff of 10% on July 23, under its Section 301 investigations into forced labour practices. This tariff replaces the now-expired Section 122 tariff. The positive news is that CUSMA-compliant goods are exempted.

If you would like to review my mapping analysis of U.S. softwood lumber duties, Section 232 tariffs, and Section 338 tariffs affecting B.C. forest products, please feel free to reach out. For View From The Stump subscribers, this analysis was included in the July edition of the newsletter.

Product groups that might be subject to both softwood lumber duties and Sec 338 tariffs potentially include products classified under HTSUS heading 4409.10, such as mouldings, trim and baseboards as well as under 4421.99, including fencing and various specialty wood products.

There is one product group that may fall uniquely into an overlap area between Section 232 and Section 338: HTSUS 9403.60 – bookcases, coffee tables, and other wooden furniture ($43 million in exports to US in 2025). Whether this overlap is intentional remains unclear. It may reflect a misinterpretation on my part, an inconsistency in the White House tariff annexes, or simply a category that requires further specification.

Despite the broad reach of the new measures, several major forest products currently remain outside the scope of US tariffs. Products not included on the White House Section 338 annex lists include newsprint, market pulp, OSB, I-beams, glulam and cross-laminated timber (CLT).

Publicly, the response from both the Canadian and provincial governments has been surprisingly mild. Canada is now imposing a tariff of 25% on cabinets and vanities. There are, however, voices in the United States raising concerns. The American Forest & Paper Association (AF&PA) warned that “broad tariffs on Canadian inputs could create real disruptions and uncertainty for industries like ours, which depend on integrated North American supply chains to make pulp, paper, packaging and tissue products.”

Similarly, the USW and IAM unions sent a letter to the US Trade Representative, Jamieson Greer urging reconsideration of the tariffs.

These Section 338 tariffs are scheduled to take effect on August 19^th. That does not necessarily mean they will. President Trump has a well-established record of abrupt changes to trade policy. It is conceivable that these new tariffs were introduced primarily to add pressure on negotiations for a substantially amended or successor agreement to Canada-US-Mexico Agreement (CUSMA).

Cross-border discussions have intensified in recent weeks, raising the possibility that the tariffs could be reduced, delayed, or even withdrawn. At present, however, there is no credible indication that this will occur. For now, optimism appears to be based more on hope than evidence. As always, I hope that forest products are not used as a bargaining chip in negotiations aimed at securing relief for other products affected by these tariffs or as part of broader efforts to renegotiate CUSMA.

Assessing which producers will ultimately be affected by the Section 338 tariffs is not straightforward. In its Q2 2026 results, West Fraser indicated that its MDF shipments are not affected, while only a small percentage of its plywood shipments and likely low double-digit percentage of its LVL shipments are exposed.

For all manufacturer of the products listed, it’s the indirect exposures and the potential impact on downstream supply chains that is hard to assess. Overall, there is $1 billion of BC forest product exports at stake; however, that is spread over several exporters. Section 338 tariffs are yet another critical blow that could lead to lower harvesting, reduced manufacturing, and potentially additional curtailments or mill closures for small and large businesses. For loggers and seller of logs, know your customers as decisions to change course could come fast after August 19^th if there are no variances from the tariff implementation.

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For more opinion and industry analysis, it will all be in the September 2026 View From The Stump newsletter coming out later in September.

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Written By David Elstone, RPF

Publisher, View From The Stump newsletter

Managing Director, Spar Tree Group Inc.

david@spartreegroup.com