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Canada’s forestry industry plans to divert a significant share of its wood exports from the US to new international markets, claiming that Donald Trump’s latest trade tariffs will lead to lumber shortages and drive up building costs in America.
Canadian producers are seeking to divert around 10 per cent of the lumber normally sent south of the border to new buyers in the UK, EU and Middle East after the US president in September added a 10 per cent tariff on lumber, on top of an existing 35 per cent duty.
The aim to send some 1bn board feet to alternative markets — enough to build at least 75,000 average size American homes — underscores how Trump’s tariffs are starting to reshape some global supply chains, although tensions between the US and Canada over wood exports have simmered for more than half a century.
Ravi Parmar, the forestry minister of the Canadian province of British Columbia, which is spearheading the export shift, claimed that the US will “soon be begging . . . to come back and take our lumber” due to supply gaps.
“The US simply needs to fact-check better before they end up with a large shortage of lumber that may cause further housing shortages,” said Rick Doman, chair of the Forestry Innovation Investment board of British Columbia, which produces over half of Canada’s lumber.
Washington’s escalating trade measures towards Ottawa have led to shutdowns and job losses in Canada’s C$87bn ($63bn) forestry industry, one of the country’s largest employers.
About two-thirds of Canada’s softwood production is exported, with 90 per cent of that sent to the US, according to government data.
But opinion in the US is divided over the potential impact of Canadian rerouting, which will start with the opening of a new export promotion office in the UK.
Trump has repeatedly railed against Canada’s lumber industry, issuing an executive order in March for an “immediate expansion of American timber production” to reduce reliance on imports and “protect our national and economic security”.
The US accuses Canada of dumping excess lumber into its market that is subsidised because trees come from public Crown land, where “stumpage fees” paid to harvest wood are often below market rates. US producers buy pricier timber from private land.
Zoltan van Heyningen, executive director of the US Lumber Coalition, a lobby group, said the American timber industry could replace 1bn board feet of Canadian imports “without batting an eyelid”.
“Canadian exports to non-US markets have been declining since 2016,” he said, adding that opening an office in the UK was “not going to change that trend.”
However, the National Association of Home Builders, the US construction lobby, has warned that restricting supply from Canada would raise American housebuilding and renovation costs.
With American sawmills operating at just 64 per cent of capacity it “will take years” for US domestic lumber production to expand to meet industry demands, according to the NAHB.
Since 2016, the US lumber industry has increased its production capacity by more than 8bn board feet, according to van Heyningen, supplying over 37bn board feet to the domestic market last year.
But the US relies on a further 12bn board feet of softwood lumber from Canada for use mostly in housebuilding. Even allowing for spare US sawmill capacity and average recent American exports of 1.3bn board feet a year, the US is currently 3.2bn board feet short of meeting current demand, according to analysis by Fastmarkets, a price reporting agency.
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Once Canada diverts up to 1bn board feet of lumber annually, the US “may feel the supply crunch it appears to be creating”, argued Doman.
Mike McDonald, a UK-based consultant appointed by the British Columbia provincial government to lead the export expansion, acknowledged it would take time to establish confidence in Canadian lumber among British and other European consumers.
Historically, with its colonial links, Canada was a major supplier of lumber to the UK with exports peaking in the 1980s, but then declining in the 1990s as timber from the Nordic countries of Europe supplanted Canadian products.
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“We’re trying to establish a beachhead, looking for port facilities for container and bulk shipments for BC [British Columbia] producers and facilities to handle shipments into the UK,” he said, adding that the target for the first shipments was the second quarter of 2026.
The UK currently imports about 2.5bn board feet of sawn wood, equivalent to roughly two-thirds of demand, with the majority coming from Sweden, Latvia, Ireland and Finland.
“It’s never easy entering a market . . . but I can say now, this is a long-term commitment from both government and industry,” McDonald said.
Data visualisation by Jonathan Vincent
