Canada weighs limiting lumber exports to solve US trade dispute, BC premier Says
Canadian officials are open to considering limits on how much softwood lumber can be exported to the U.S. to try to resolve some of the trade friction between the countries, according to the leader of British Columbia.
“We think there is actually an opportunity for lumber to be one of the early agreements and wins that are struck,” Premier David Eby said in an interview with Bloomberg News.
“One of the asks for years out of the American coalition has been a quota – that there’s a fixed amount of lumber that gets to come from Canada,” he said. “And I think that, for the first time, there’s some willingness to have a conversation about what that could look like.”
Government ministers from Canada’s provinces have had discussions with Prime Minister Mark Carney’s administration to “bring forward proposals that historically have been off the table,” said Eby, whose province is the country’s largest lumber exporter and home to major producers such as Canfor Corp. and West Fraser Timber Co.
The goal of a quota deal would be to stabilize access to affordable building materials for Americans and secure jobs for Canadian workers, the premier said.
British Columbia and Quebec combined for 64% of all Canadian lumber exports last year, according to Statistics Canada data.
It’s not clear how much appetite the U.S. has for an agreement with Canada on lumber. Carney’s government has met a number of U.S. President Donald Trump’s demands – including an immediate increase in defense spending and the elimination of Canada’s digital services tax. Trump nevertheless sent Carney a letter last week threatening to raise the U.S. tariff on some Canadian products to 35%.
Trump has also directed the Commerce Department to study the potential national security harm of U.S. importing foreign wood, which could presage additional tariffs.
On the other hand, U.S. homebuilders have warned that Trump’s tariff policies are inflationary, and could increase construction costs by almost $11,000 a home. Canada represents almost one-quarter of the softwood lumber supply in the U.S., according to the National Association of Home Builders.
Trump has been on a fresh tariff spree this month. He has announced new import taxes on copper, said he’s likely to put levies on pharmaceuticals soon and sent out letters to trading partners with high proposed tariff rates – while at times downplaying his willingness to negotiate.
“We have tariffs going on because we want tariffs, and we want the money coming into the United States,” Trump told reporters Tuesday.
A representative for Dominic LeBlanc, the minister responsible for Canada-U.S. trade, didn’t respond to a request for comment on Eby’s remarks.
U.S. complaints about Canadian softwood lumber go back decades. American lumber producers claim Canadian sawmills are unfairly subsidized because provincial governments set low fees for harvesting timber on public lands. Canada denies this.
The two sides reached a truce in 2006, when Canada agreed to a structure that saw export charges added to its lumber during periods when market prices were below a certain level. That deal expired in 2015.
Time is of the essence to mitigate the escalating costs being imposed by the feud. U.S. anti-dumping duties are due to rise soon. Together with an increase countervailing duties expected later this year, it’s possible total U.S. duties on Canadian softwood lumber will more than double to 34.5%.
Canada has legally challenged U.S. levies on lumber, which means billions of dollars in duties that have been collected are sitting in escrow, and there are hopes that money could be returned to companies.