Effective August 19th, the United States will apply new US tariffs of 50% on a range of BC forest products exports to the US. …While initial news coverage tended to make light of the trade action likely because of the likely symbolic inclusion of hockey sticks, the implications for BC’s already beleaguered forest products sector are serious. …I estimate that BC exported up to approximately $991 million of forest products potentially subject to Section 338 tariffs to the US in 2025. …The impacts of these new tariffs extend well beyond hockey sticks and are likely to be felt across a broad range of forest manufacturing segments. Major producers of veneer, LVL, plywood, MDF, paper products and furniture could be affected directly. However, the impacts may be felt further down the value chain. 

Determining which US duties and tariffs applied to Canadian forest products has become increasingly complex. One major difference from previous tariff threats is that the new Section 338 tariffs apply to CUSMA-compliant products, that would otherwise qualify for tariff-free access to the US market. Products already covered by Section 232 are exempt from the new Section 338 measures. This includes Canadian logs and softwood lumber, which are currently subject to a 10% Section 232 tariff as well as upholstered furniture and kitchen cabinets and vanities, which currently face a 25% tariff that is scheduled to increase on January 1, 2027. There are also products that are not covered by Section 232 tariffs but are subject to softwood lumber antidumping (AD) and countervailing (CVD) duties, and which may also be captured by Section 338 tariffs, resulting in a potentially devastating cumulative burden.

For all manufacturer of the products listed, it’s the indirect exposures and the potential impact on downstream supply chains that is hard to assess. …Section 338 tariffs are yet another critical blow that could lead to lower harvesting, reduced manufacturing, and potentially additional curtailments or mill closures for small and large businesses.