If you’ve tried to build a deck or frame a house lately, you’ve probably stared at the receipt in disbelief. Wood is expensive. Kinda terrifyingly expensive. Most people blame inflation or supply chains, but there is a 40-year-old ghost haunting your local hardware store: the US Canada lumber dispute. It’s the longest-running trade war in North American history, and as of early 2026, it has shifted from a slow simmer to a full-blown forest fire.
Honestly, it’s a mess.
On one side, you have American sawmill owners who claim Canada "cheats" by subsidizing its wood. On the other, Canadian producers say they’re just more efficient. Caught in the middle? Anyone trying to buy a home.
The $10,000 "Tax" on Your Front Door
Let's get straight to the point. The National Association of Home Builders (NAHB) recently estimated that these tariffs add roughly $10,900 to the cost of a new single-family home. That isn't just a rounding error. It's a massive hurdle for first-time buyers.
Why does this happen? The US cannot grow enough trees to meet its own demand. We import about a third of the softwood lumber we use, and nearly 85% of those imports come from Canada. When the US government slaps a tariff on that wood, Canadian companies don't just eat the cost. They pass it to the builder, who passes it to you.
Why We Are Still Fighting Over Trees in 2026
The core of the argument hasn't changed since the 1980s. In the US, most timberland is privately owned. If you want to cut down trees in Georgia, you pay market price. In Canada, about 90% of the forests are "Crown land," owned by the provincial governments.
The US Lumber Coalition argues that the "stumpage fees" Canadian provinces charge are artificially low. They call it a backdoor subsidy. Canada says, "Wait a minute, our systems are just different, and our wood is high-quality."
The 2025-2026 Tariff Explosion
The situation took a sharp turn for the worse last year. In late 2025, the US Department of Commerce finalized its sixth administrative review, and the numbers were staggering.
- Canfor Corporation saw combined duty rates hit a massive 47.59%.
- West Fraser Mills ended up at 26.47%.
- The "all others" rate for most Canadian producers jumped to over 35%.
Then came the Section 232 "national security" tariffs. Yes, the US government officially classified imported wood as a potential threat to national security. This added another 10% global tariff on top of the existing anti-dumping and countervailing duties. If you're doing the math, some Canadian wood is now crossing the border with a 45% to 55% tax attached.
The CUSMA Review: The 2026 "Nuclear Option"
We are currently in a high-stakes year because of the Canada-United States-Mexico Agreement (CUSMA) review. This is the "joint review" scheduled for July 2026.
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For most of 2025, a specific exemption allowed about 90% of Canadian goods to enter the US duty-free. But softwood lumber was the glaring exception. Now, there is talk in Washington about using the 2026 review to kill the exemption entirely unless Canada makes massive concessions on dairy, digital taxes, and—you guessed it—lumber.
Canadian Prime Minister Mark Carney has called the current trade environment "unpredictable." That's a polite way of saying it's chaotic. While Canada has launched legal challenges under Chapter 10 of CUSMA, these panels often take years to reach a verdict. By then, the sawmills in British Columbia might already be closed.
Real-World Fallout: From BC to Florida
It isn't just a boardroom fight. It’s hitting the ground.
In British Columbia, the "forestry crisis" is real. Companies like Domtar and Interfor have announced "curtailments"—basically, they are shutting down or slowing production because they can’t afford the tariffs. When a mill in a small BC town closes, the whole town feels it.
Down south, the US Lumber Coalition argues that these duties are necessary to protect American jobs. They point out that US mills have added billions of board feet in capacity since 2016. They believe American producers can eventually fill the gap. But "eventually" doesn't help a builder in Florida today.
What Most People Get Wrong About the Dispute
You'll often hear that if we just "negotiated a new agreement," the problem would vanish. We had one once—the 2006 Softwood Lumber Agreement. It expired in 2015. Since then, it’s been a free-for-all.
The reason we don't have a new deal? Neither side can agree on what a "fair" price for a Canadian tree looks like. The US wants a quota system (limiting how much Canada can sell), while Canada generally prefers a pure tax system—or better yet, no tax at all.
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Is There Any Good News?
Sorta. Some market analysts, like those at Raymond James, recently upgraded forestry stocks. They think the "worst-case scenario" (a total collapse of trade) has been avoided for now. There's also a growing move toward "mass timber" construction in the US, which uses engineered wood for high-rises. This is creating new demand that might eventually force a more permanent trade solution.
Your Move: Navigating the Lumber Mess
If you are a contractor, a homeowner, or just someone looking at the housing market, don't wait for a "peace treaty" in the US Canada lumber dispute. It probably isn't coming this year.
Here is how to handle the 2026 volatility:
- Lock in Prices Early: If you’re planning a project for summer 2026, get your lumber quotes and contracts signed now. The July CUSMA review will likely cause a price spike regardless of the outcome.
- Explore Alternative Materials: With kitchen cabinet duties hitting 50% as of January 1, 2026, look at domestic US-made cabinetry or non-wood alternatives like high-density fiberboard (HDF) which may carry different tariff classifications.
- Watch the Supreme Court: A ruling on the President's authority to use the International Emergency Economic Powers Act (IEEPA) for tariffs is expected soon. This could invalidate some of the 2025 surcharges, potentially leading to refunds for importers.
- Diversify Your Sourcing: If you are a large-scale builder, look toward European or Southern Hemisphere suppliers. While they also face the 10% Section 232 tariff, they aren't hit with the 35% "subsidy" duties specific to Canada.
This dispute is a marathon, not a sprint. It’s a complex dance of national security, local politics, and old-fashioned protectionism. Stay informed, because the price of the roof over your head depends on it.