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Calgary Herald
20-07-2025
- Business
- Calgary Herald
Trump could crush Canada's softwood exports. Here's how a new crisis could play out
Article content WASHINGTON, D.C. — The Canada-U.S. softwood lumber trade relationship has dealt with ups and downs, disputes and resolutions, for decades. Anxiety for Canadian exporters is reaching a fever pitch again as the U.S. threatens to more than double softwood lumber duties and add even steeper tariffs under a national security investigation. Article content Canadian foresters, mills, and governments that enjoy taxes, economic spinoffs and stumpage fees from Crown land will feel the pain if they lose too much access to the massive U.S. market. But larger producers have been preparing for just this kind of contingency and have cleverly hedged their bets, building capacity in the U.S., where they can sell as much as they want to Americans, tariff-free. Article content Article content Article content Canadian firms will soon receive word from the U.S. Commerce Department's Sixth Administrative Review (AR6) of U.S. countervailing and anti-dumping duties on Canadian softwood lumber exports, with the rate expected to jump from around 14 per cent to roughly 34 per cent. For Canfor, the Vancouver-based lumber giant selected as a mandatory respondent in the AR6 review, it will be even worse. Its duties are calculated based on its own shipments and prices, not an industry average, like it is for other companies. Article content Article content Then there's the threat of tariffs from President Donald Trump's ongoing national security investigation of Canadian lumber imports under Section 232 of the Trade Expansion Act, which he ordered in March and is due late this year. Currently, lumber shipments are exempted from Trump's baseline tariffs, because they're covered by the U.S.-Mexico-Canada trade deal (USMCA), but that could soon change based on the findings of the 232 probe. Article content Article content National Post breaks down the position of the two countries, what the impacts could be, and how Canadian producers are trying to mitigate the potential damage of punitive trade barriers. Article content Article content What American producers want Article content The U.S. Lumber Coalition is playing for keeps. It backs higher anti-dumping duties and tariffs for what it sees as a subsidized domestic industry. It claims Canadian producers don't pay market rates for stumpage because their forests are publicly owned and provincial governments set the stumpage rates, while U.S. producers face higher market rates. But it doesn't stop there: the U.S. coalition also wants to see Canada's U.S. market share significantly chopped. Article content Miller isn't shy about the goals: 'A countrywide quota with no exemptions and no carveouts, and a single-digit market share' for Canadian lumber. Article content Today, Canada has a 25 per cent market share, with exports of 12 billion feet of softwood lumber to the U.S. each year, according to the coalition. Softwood lumber accounts for about 7.5 per cent of Canadian exports; in 2023, the U.S. was the destination for 68 per cent of those forestry products. The whole industry is worth about $33.4 billion in sales annually and employs more than 200,000 workers across Canada, according to a report this year from RBC.
Vancouver Sun
20-07-2025
- Business
- Vancouver Sun
Trump could crush Canada's softwood exports. Here's how a new crisis could play out
WASHINGTON, D.C. — The Canada-U.S. softwood lumber trade relationship has dealt with ups and downs, disputes and resolutions, for decades . Anxiety for Canadian exporters is reaching a fever pitch again as the U.S. threatens to more than double softwood lumber duties and add even steeper tariffs under a national security investigation. Canadian foresters, mills, and governments that enjoy taxes, economic spinoffs and stumpage fees from Crown land will feel the pain if they lose too much access to the massive U.S. market. But larger producers have been preparing for just this kind of contingency and have cleverly hedged their bets, building capacity in the U.S., where they can sell as much as they want to Americans, tariff-free. Canadian firms will soon receive word from the U.S. Commerce Department's Sixth Administrative Review (AR6) of U.S. countervailing and anti-dumping duties on Canadian softwood lumber exports, with the rate expected to jump from around 14 per cent to roughly 34 per cent. For Canfor, the Vancouver-based lumber giant selected as a mandatory respondent in the AR6 review, it will be even worse. Its duties are calculated based on its own shipments and prices, not an industry average, like it is for other companies. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. 'Canfor's rate will be 45 per cent, plus or minus a per cent,' said Andrew Miller, chairman of Oregon-based Stimson Lumber and chair of the U.S. Lumber Coalition. 'So they'll get a kick in the teeth from the next round of duties.' Then there's the threat of tariffs from President Donald Trump's ongoing national security investigation of Canadian lumber imports under Section 232 of the Trade Expansion Act , which he ordered in March and is due late this year. Currently, lumber shipments are exempted from Trump's baseline tariffs, because they're covered by the U.S.-Mexico-Canada trade deal (USMCA), but that could soon change based on the findings of the 232 probe. National Post breaks down the position of the two countries, what the impacts could be, and how Canadian producers are trying to mitigate the potential damage of punitive trade barriers. The U.S. Lumber Coalition is playing for keeps. It backs higher anti-dumping duties and tariffs for what it sees as a subsidized domestic industry. It claims Canadian producers don't pay market rates for stumpage because their forests are publicly owned and provincial governments set the stumpage rates, while U.S. producers face higher market rates. But it doesn't stop there: the U.S. coalition also wants to see Canada's U.S. market share significantly chopped. Miller isn't shy about the goals: 'A countrywide quota with no exemptions and no carveouts, and a single-digit market share' for Canadian lumber. Today, Canada has a 25 per cent market share, with exports of 12 billion feet of softwood lumber to the U.S. each year, according to the coalition. Softwood lumber accounts for about 7.5 per cent of Canadian exports; in 2023, the U.S. was the destination for 68 per cent of those forestry products . The whole industry is worth about $33.4 billion in sales annually and employs more than 200,000 workers across Canada, according to a report this year from RBC. If Trump stacked a 20 per cent tariff on top of the existing duties, driving down some of Canada's approximately 12 billion board feet of annual softwood exports to the U.S., Miller believes the U.S. industry could almost immediately replace at least two billion feet worth through quick operational changes. Incremental mill upgrades over three years could then add another three to four billion feet of production, he said. 'I really believe that within three years we would have replaced, through U.S. production of lumber, about half of what Canada currently exports to the U.S.,' he said, nodding to Trump's comments earlier this year about the U.S. not needing any Canadian lumber . The coalition is pushing for a tariff rate from the Section 232 investigation that starts at 15 to 20 per cent and goes higher from there. That, Miller explained, will incentivize U.S. sawmill owners struggling with thin margins to hire more people and invest in upgrades, bolstering U.S. production. This week, provincial leaders offered ways to settle the dispute. B.C. Premier David Eby said Canada is willing to consider a quota on exports to the U.S. for the first time , and New Brunswick Premier Susan Holt also said quotas are on the table as an option for trade negotiations. Miller, head of the American coalition, was far from impressed by Eby's comments. A quota might stabilize the market and secure jobs for Canadian workers, he said, but 'at whose expense?' His answer: 'U.S. mill workers.' '(Eby) is not serious about a settlement that is satisfactory to the coalition. He is floating a political trial balloon designed to derail the implementation of the AR6,' he said. Kurt Niquidet, president of the BC Lumber Trade Council, refused to comment on what his organization prefers by way of a solution. He said options included quotas, tariffs, or a hybrid approach. But he was clear that the industry wants Ottawa to resolve things with the U.S. quickly. 'We think that the federal government should be making this issue a priority and looking for a negotiated settlement,' he said. Niquidet argues that the U.S. already has 'housing affordability issues' and taxing or restricting Canadian lumber could only make things worse. 'If the trade measures are too punitive, it just serves to drive up the prices and the costs of lumber in the U.S.,' he said. That's why the National Association of Home Builders (NAHB), the trade association based in Washington, has been leading the charge to fight the duties and potential tariffs. It has repeatedly warned the White House that tariffs would only '(slow) down the domestic residential construction industry' at a time when Trump has vowed to address the country's 'severe housing shortage and affordability crisis.' In recent years, tariffs have increased the average home price by nearly US$11,000 because of recent tariffs, according to the April 2025 NAHB/Wells Fargo Housing Market Index, when the average home sticker price is just north of US$400,000. There are also about 3.5 million Americans who work in the residential housing sector, and millions more working in commercial and industrial construction. The NAHB has actively shared its concerns as part of the Section 232 investigation process and expressed concern that the U.S. lumber supply cannot meet the needed demand on its own anytime soon. Niquidet agrees. He said claims by the U.S. industry and the president that American producers can make up for lost Canadian supply are 'just not true.' The twist in all this is that a growing number of producers in the U.S. are actually Canadian-owned. Vancouver-based West Fraser started buying and investing in U.S. sawmills back in the early 2000s to diversify its assets and shore up supplies threatened in Canada by mountain pine beetles and wildfires. Others — including Canfor, Resolute and Interfor (whose U.S. operations are bigger than its Canadian ones) — followed suit in part to avoid trade barriers, the trend only accelerating in Trump's first term, when he imposed 20 per cent tariffs on Canadian softwood exports. Today, estimates are that Canadian lumber firms control as much 40 per cent of softwood lumber production capacity in the American South. In most cases, they've kept local families and employees in place, seamlessly taking over and often modernizing while keeping afloat many sawmills that might've otherwise gone under. When asked about the paradox of Canadian firms buying up U.S. sawmills, Miller doesn't have any concerns. 'A dollar invested in a U.S. sawmill is a dollar invested in a U.S. sawmill employing U.S. citizens operating that sawmill, cutting trees and shipping them,' he said. 'We don't care who operates them. You know, it's a free market.' (However, Miller said if foreign owners ever wanted to join the U.S. Lumber Coalition, which advocates against imports, it wouldn't allow them to.) The U.S. president has also repeatedly told foreign manufacturers that if they want to escape punitive trade measures, they should invest on U.S. soil and help ramp up domestic American production. '(Trump would) take that as a big victory,' Miller said of the lumber takeovers by Canadians. 'That's what he wants,' National Post tmoran@ Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
Edmonton Journal
20-07-2025
- Business
- Edmonton Journal
Trump could crush Canada's softwood exports. Here's how a new crisis could play out
Article content WASHINGTON, D.C. — The Canada-U.S. softwood lumber trade relationship has dealt with ups and downs, disputes and resolutions, for decades. Anxiety for Canadian exporters is reaching a fever pitch again as the U.S. threatens to more than double softwood lumber duties and add even steeper tariffs under a national security investigation. Article content Canadian foresters, mills, and governments that enjoy taxes, economic spinoffs and stumpage fees from Crown land will feel the pain if they lose too much access to the massive U.S. market. But larger producers have been preparing for just this kind of contingency and have cleverly hedged their bets, building capacity in the U.S., where they can sell as much as they want to Americans, tariff-free. Article content Article content Article content Canadian firms will soon receive word from the U.S. Commerce Department's Sixth Administrative Review (AR6) of U.S. countervailing and anti-dumping duties on Canadian softwood lumber exports, with the rate expected to jump from around 14 per cent to roughly 34 per cent. For Canfor, the Vancouver-based lumber giant selected as a mandatory respondent in the AR6 review, it will be even worse. Its duties are calculated based on its own shipments and prices, not an industry average, like it is for other companies. Article content Article content Then there's the threat of tariffs from President Donald Trump's ongoing national security investigation of Canadian lumber imports under Section 232 of the Trade Expansion Act, which he ordered in March and is due late this year. Currently, lumber shipments are exempted from Trump's baseline tariffs, because they're covered by the U.S.-Mexico-Canada trade deal (USMCA), but that could soon change based on the findings of the 232 probe. Article content Article content National Post breaks down the position of the two countries, what the impacts could be, and how Canadian producers are trying to mitigate the potential damage of punitive trade barriers. Article content Article content Article content The U.S. Lumber Coalition is playing for keeps. It backs higher anti-dumping duties and tariffs for what it sees as a subsidized domestic industry. It claims Canadian producers don't pay market rates for stumpage because their forests are publicly owned and provincial governments set the stumpage rates, while U.S. producers face higher market rates. But it doesn't stop there: the U.S. coalition also wants to see Canada's U.S. market share significantly chopped. Article content Miller isn't shy about the goals: 'A countrywide quota with no exemptions and no carveouts, and a single-digit market share' for Canadian lumber. Article content Today, Canada has a 25 per cent market share, with exports of 12 billion feet of softwood lumber to the U.S. each year, according to the coalition. Softwood lumber accounts for about 7.5 per cent of Canadian exports; in 2023, the U.S. was the destination for 68 per cent of those forestry products. The whole industry is worth about $33.4 billion in sales annually and employs more than 200,000 workers across Canada, according to a report this year from RBC.
Business Mayor
07-05-2025
- Business
- Business Mayor
Ill winds are blowing for Labour's 2030 deadline for clean energy
'I mmensely challenging' and pushing the limits 'of what is feasibly deliverable'. That was the state-owned National Energy System Operator's description of its own proposals on how to decarbonise electricity generation in Great Britain by 2030. In short, it thought clean power by that date, a key Labour manifesto pledge, was 'credible' and 'achievable' as long as little went wrong along the way. Neso's £200bn plan, detailing a rapid rollout of offshore wind, onshore wind, solar farms plus a major upgrade of the electricity grid, was adopted virtually unchanged by the government at the end of last year. Now something has gone wrong. Ørsted, the Danish developer, has stopped work on one of the world's biggest offshore wind projects, Hornsea 4 off the Yorkshire coast. It can't make the numbers add up. It would rather write off £400m-plus in impairments and the cost of cancelling orders with suppliers. One windfarm alone, you might think, cannot put a serious dent in the overall 2030 project. Up to a point, that's true. There is time to catch up and Neso's report spoke about 'some flexibilities at the margin' when it came to technologies – extra solar could substitute for a shortfall in wind. In any case, the precise 2030 target for installed offshore wind capacity hasn't yet been nailed down; it is between 43 and 51 gigawatts depending on how many carbon capture sites and green hydrogen plants end up being built. Yet the basic point remains: Hornsea 4 is a bad one to lose. It is a 2.4GW project – vast, in other words – and, whatever fiddles can be made around the edges, Neso was always clear that offshore wind would be 'the bedrock' of a cleaned-up system, providing more than half of Great Britain's generation. If the government already needed to secure 20GW of offshore wind in the next couple of years, which is roughly how the blurry maths works out, the requirement has gone up by 10% overnight. A demanding deadline has become even more demanding. Ed Miliband, the energy secretary, would be within his rights to be furious with Ørsted. The company grumbled about supply chain costs, interest rates and 'adverse macroeconomic developments', but no other offshore developer that won a price contract in last year's auction round (AR6) has dropped its project. It rather looks as if Ørsted bid too aggressively, was distracted by its woes in the US, or failed to agree contracts with suppliers in time, or all three. Hornsea's place in the AR6 auction could have been taken by a disappointed bidder, such as RWE. Alternatively, Ørsted may be engaged in brinkmanship, a question asked by Barclays' energy analyst. The headline on the company's announcement said Hornsea 4 would be discontinued 'in its current form', seemingly suggesting it would be back in the game if only the government would cough up more than the £58.87 per megawatt hour at which the AR6 auction settled for offshore wind projects. The energy department's comment that it would 'work with Ørsted to get Hornsea 4 back on track' hinted it may indeed be up for renegotiation. If so, those entitled to be furious would be other AR6 developers who are delivering what they agreed at the original price. Whatever happens at Hornsea 4, the timing of Ørsted's move sends a bad price signal (from the point of view of the government and consumers) for AR7, the renewables auction due this summer. The background noise is already complaints from companies about ministerial dithering over whether to switch to a zonal pricing system for electricity; and, if zonal is rejected, what does the alternative of a reformed national market look like? The information is critical to anybody planning to invest billions in generating capacity. skip past newsletter promotion Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The zonal uncertainty had probably already added upwards pressure on prices for new offshore wind capacity. Now Ørsted has created a catch-up problem, while advertising worries over costs. Energy analysts reckon the government will be lucky to contain inflation in offshore wind contracts to 10%. It could be higher. Therein lies one problem with setting a rigid 2030 deadline. You can end up paying extra to get the job done on time, or renegotiating major projects from a position of weakness. We'll reserve judgment until we see the actual prices in the AR7 auction. But 2030, which many energy executives never thought was do-able anyway, already looks too tight for comfort.
