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The U.S.-Canada softwood lumber dispute stands as the most protracted trade conflict between the two countries…. An important aspect of this trade dispute is the substitutability of lumber products between the two countries. Canadian lumber imports are detrimental to the U.S. industry only when the products are substitutes. In such a scenario, the imposition of trade restrictions would have a significant influence on the domestic market…. We investigate dynamic relationships between prices for Spruce-Pine-Fir, a softwood species primarily imported from Canada, and Southern Yellow Pine, one of the most popular softwood species domestically produced in the U.S…. Our empirical findings indicate that within the +/-3.4% price differential band, the two lumber products demonstrate a higher degree of substitutability.

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