US tariffs on Canadian lumber currently stack in two layers. Most Canadian softwood producers pay combined antidumping and countervailing duties of about 35%, and since October 14, 2025, an additional 10% Section 232 tariff applies on top of that.1The White House. Adjusting Imports of Timber, Lumber, and Their Derivative Products Into the United States For a typical shipment at the all-others rate, the total duty burden clears 45%. Individually investigated companies face more.
Why the Duties Exist
Most commercial timberland in Canada is publicly owned, and provincial governments set the fee companies pay to harvest trees. US producers have argued for decades that those fees run below market rates, giving Canadian mills a cost advantage that American operators working on private land cannot match.
Two separate legal tracks address this. Countervailing duties respond to government subsidies: when Commerce finds a foreign government providing a financial benefit to its exporters, it imposes a duty equal to the net subsidy.2Office of the Law Revision Counsel. 19 USC 1671 – Countervailing Duties Imposed Antidumping duties respond to a different problem, selling goods in the US market for less than their normal value in the home market, and the duty equals the price gap.3Office of the Law Revision Counsel. 19 USC 1673 – Antidumping Duties Imposed Before either duty takes effect, the US International Trade Commission also has to find that the imports are causing real injury to US producers.
Current Rates by Producer
The most recent administrative review, finalized in 2025, set countervailing duty rates between 12.12% and 16.82%.4Federal Register. Certain Softwood Lumber Products From Canada – Final Results Combined with antidumping duties from the same period, the totals for individually investigated companies and everyone else came out as follows:5Global Affairs Canada. Softwood Lumber Recent Developments
- Canfor Corporation: 47.59% combined (35.47% antidumping plus 12.12% countervailing)
- West Fraser Mills: 26.47% combined (9.65% antidumping plus 16.82% countervailing)
- All other companies: 35.16% combined (20.53% antidumping plus 14.63% countervailing)
These rates jumped sharply from the previous review, which had set the all-others combined rate at roughly 14.5%.6International Trade Administration. Commerce Department Announces Final Results of Softwood Lumber From Canada Countervailing Duty Administrative Review Any importer who deposited at the older rates will owe the difference once entries from the review period are liquidated.
The Section 232 Tariff Layered on Top
A separate 10% tariff on all softwood timber and lumber imports took effect on October 14, 2025, under Section 232 of the Trade Expansion Act.1The White House. Adjusting Imports of Timber, Lumber, and Their Derivative Products Into the United States The tariff is global, not Canada-specific, and stays in place unless a country reaches a separate deal with the United States addressing the national security concerns cited in the proclamation.
The same order set Commerce up to report by October 2026 on whether hardwood imports warrant an additional tariff. Separately, 25% tariffs already apply to certain upholstered wooden products and kitchen cabinets, with cabinet and vanity rates scheduled to reach 50%.7Congressional Research Service. U.S.-Canada Softwood Lumber Trade – Current Issues for Congress
What Lumber Is Covered
The duties reach softwood species used in construction framing, most commonly spruce, pine, and fir (grouped as SPF). The scope covers boards, dimensional lumber, beams, and timber that has been sawn but not yet turned into a finished product. Classification runs through the Harmonized Tariff Schedule, which sorts wood by thickness, width, species, and level of processing.
The line falls between lumber that still functions as a building material and products that have been transformed into something else. A two-by-four is in scope. A finished bookshelf is not.
Products Excluded
Federal law carves out several product categories that have been manufactured beyond basic lumber:8Office of the Law Revision Counsel. 19 USC Chapter 4 – Tariff Act of 1930, Softwood Lumber
- Trusses and truss kits
- I-joist beams
- Complete window and door frames
- Furniture
- Pallets and pallet kits
- Garage doors
- Edge-glued wood panels
- Assembled box-spring frames
Lumber that originated in the United States and was shipped to Canada only for minor processing also qualifies for exclusion, provided the work was limited to kiln drying, planing, or sanding, and the importer can prove US origin to CBP.8Office of the Law Revision Counsel. 19 USC Chapter 4 – Tariff Act of 1930, Softwood Lumber
The Atlantic Provinces Carve-Out
Softwood lumber from three Atlantic provinces is exempt from both antidumping and countervailing duties: Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. Most timber in those provinces comes from private land rather than subsidized Crown land.9Global Affairs Canada. Frequently Asked Questions – Softwood Lumber The lumber has to be certified by the Atlantic Lumber Board as first produced in, or made from logs harvested in, one of the three qualifying provinces.
New Brunswick is not on that list. Lumber originating there is fully subject to US duties, and treating “Atlantic Canada” as a single exempt region will cost an importer money at the border.9Global Affairs Canada. Frequently Asked Questions – Softwood Lumber
Documentation the Importer Must File
The importer of record carries legal responsibility for every filing. Three main sets of paperwork apply to Canadian softwood lumber.
Every shipment needs an Entry Summary filed on CBP Form 7501 through the Automated Commercial Environment.10U.S. Customs and Border Protection. ACE – The Import and Export Processing System The form captures the Harmonized Tariff Schedule classification, the declared transaction value, and the estimated duties owed.11U.S. Customs and Border Protection. CBP Form 7501 – Entry Summary Because AD/CVD rates apply directly to declared value, that number is where most of the financial risk sits.
Softwood lumber importers also file a product-specific declaration listing the export price for each shipment and any estimated export charge calculated using Commerce-published rates. The importer certifies reasonable inquiry into whether the export price is consistent with any Canadian export permit and that all applicable export charges have been paid.12Office of the Law Revision Counsel. 19 USC 1683a – Softwood Lumber Importer Declaration Program
Lumber imports also trigger the Lacey Act’s plant product declaration on PPQ Form 505. That declaration requires the scientific name (genus and species) of the wood, the country where the timber was harvested (not where it was milled), the quantity in metric units, and the shipment value.13USDA APHIS. Lacey Act Declaration Requirements If the exact species varies or is unknown, the importer has to list every species that may have been used.14USDA. Plant and Plant Product Declaration – PPQ Form 505 Importers used to logging shipments as “SPF” without tracking the underlying species often get caught here.
Deposits Now, Final Bill Later
The rates paid at entry are estimated deposits, not final duties. At least once every twelve months, Commerce reviews the actual subsidy levels and dumping margins for the prior period and recalculates the rates.15Office of the Law Revision Counsel. 19 USC 1675 – Administrative Review of Determinations Once the review concludes, CBP liquidates the entry and settles the account. Lower final rate, the government refunds the difference with interest. Higher final rate, the importer gets a bill. Interest runs both directions at the rate set under the Internal Revenue Code, applied from the date the deposit was made.16Office of the Law Revision Counsel. 19 USC 1677g – Interest on Certain Overpayments and Underpayments
The most recent review more than doubled the all-others rate. Businesses that deposited at the older rate now face a substantial catch-up bill on entries from the review period. Treating the deposit as a floor rather than a ceiling, and holding cash reserves for upward adjustments, is the practical response.
Penalties for Filing Errors
Inaccurate customs filings on lumber imports carry penalties that scale with culpability. Federal law sets three tiers:17Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence
- Negligence: penalty capped at two times the lost duties, or 20% of dutiable value if the error did not affect duty calculations.
- Gross negligence: capped at four times the lost duties, or 40% of dutiable value for non-duty-affecting violations.
- Fraud: penalty can reach the full domestic value of the merchandise.
If the importer discovers and discloses the error before CBP begins a formal investigation, the numbers drop sharply. For negligence or gross negligence disclosed voluntarily, the penalty is limited to interest on the unpaid duties rather than a multiple.17Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence The government has five years from the violation to bring an action, or five years from discovery if fraud is involved.18Office of the Law Revision Counsel. 19 USC 1621 – Limitation of Actions Since administrative reviews routinely stretch years, entry errors can surface long after the lumber has been sold and framed into houses.
Effect on Housing and Construction Costs
The duties feed directly into US framing costs because Canada supplies a large share of the softwood lumber used in residential construction. Industry estimates from the National Association of Home Builders describe the combined AD/CVD rates plus the Section 232 tariff as adding thousands of dollars to the cost of building a single-family home, and the group has called the duties a tax on American builders and buyers.
With combined duties above 45% for most Canadian producers, builders choose among absorbing higher lumber costs, passing them to buyers, or substituting domestic wood that may cost more or be harder to source in volume. The pressure lands hardest at the entry-level end of the market, where buyers are most price-sensitive.
Challenging Duties Under USMCA
Canada has consistently challenged US duty determinations. Chapter 10 of the United States-Mexico-Canada Agreement offers binational panel review as an alternative to litigation in US federal court. Panels of trade law experts from both countries decide whether Commerce and the International Trade Commission correctly applied US law in setting the rates.19Office of the United States Trade Representative. Rules of Procedure for USMCA Article 10.12 Binational Panel Reviews Decisions bind the agencies, and panels can remand determinations for recalculation.
The process is designed to produce a decision within 315 days of commencement, though remands and follow-up proceedings can extend it well beyond that.19Office of the United States Trade Representative. Rules of Procedure for USMCA Article 10.12 Binational Panel Reviews While a challenge is pending, entries at the disputed rates stay unliquidated, so importers cannot get final refunds or settle amounts owed until the legal process is done.