Trade War Hits the Woods: Canada Fires Back on US Forest Products

An Editorial Opinion – Right From The Stump, August 27, 2026

On August 25, 2026, Canada announced counter-tariffs of 15, 25 and 50 per cent on targeted US products in response to the US decision to impose a 50 per cent tariff on $27.6 billion of Canadian goods. Canada’s counter-tariffs will apply to 874 product classifications, covering a matching $27.6 billion in imports from the US, with a focus on steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. The retaliation marks the start of a full-scale trade war, with Canadian tariffs taking effect on September 8.

The 50 per cent “Section 338” US tariffs came into effect on August 21 following Canada’s rejection of the US deal offer. These US tariffs apply to a wide list of products, including 103 Canadian forest product classifications. I estimatethat the affected products exported from British Columbia to the US had an export value of $991 million in 2025. A more in-depth analysis of the Section 338 tariffs is provided in the Right From The Stump post, More Than Hockey Sticks – Section 338 50% Tariffs, August 11, 2026.

The 50 per cent tariffs are only the latest escalation in US trade action against Canadian forest products. They follow Section 232 tariffs of 10 per cent on Canadian logs, lumber and shaped wood, and 25 per cent on kitchen cabinets and upholstered furniture. In addition, US duties on softwood lumber average 35.16 per cent. A detailed tariff burden comparison was provided to subscribers of the July 2026 View From The Stump newsletter.

The Canadian counter-tariffs will apply to US softwood lumber, plywood, dissolving pulp, paper and packaging products—including toilet paper—kitchen cabinets, upholstered furniture and non-upholstered furniture. AcrossCanada, I estimate these US forest product imports had a value of $3.2 billion in 2025. For US forest products enteringBritish Columbia, I estimate their 2025 import value was $527 million.

Note that Canadian counter-tariffs do not include US veneer. Plywood includes LVL.

The Canadian counter-tariffs cover 45 US forest product classifications, with either 25 per cent or 50 per cent tariffs applying depending on the product. Most forest products covered by the United States’ 50 per cent Section 338 tariff have a reciprocal 50 per cent counter-tariff from Canada. Softwood lumber, which faces US duties averaging 35.16 per cent plus a 10 per cent Section 232 tariff—for a total tariff burden of 45.16 per cent on Canadian lumber—will have a 25 per cent tariff when entering Canada from the US. Kitchen cabinets and upholstered furniture will face a 25 per cent counter-tariff, matching the US Section 232 tariff.

It makes sense that paper and packaging products are a clear focus of Canadian countermeasures. Counter-tariffs targeting $2.4 billion of US paper and packaging products will cause concern.

I suspect a substantial number of these products move back and forth between related companies across the border as part of integrated value chains. Caution is warranted before jumping to conclusions, but it is certainly worth investigating whether Canadian producers can supply similar products to those imported from the US.

Canada has fired back, but in a trade war, the forest sector still gets caught in the crossfire. Counter-tariffs are retaliation, not a defensive strategy that protects domestic producers from the impacts of tariffs on their export sales. The consequences are already emerging with Rayonier Advanced Materials announcing a temporary mill closure affecting its dissolving pulp production in Temiscaming, Ontario. Also there are reports Nova Scotia’s pine sawmills are facing shutdowns. Unfortunately, this is likely only the beginning.

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