Kelly McCloskey
Robert McKellar
Earlier this year, Tree Frog reached out to political risk expert Robert McKellar for a two-part op-ed, titled Trump’s Re-Emergence and Political Risk in the Canadian Forest Sector. Robert set the stage by looking at Trump’s leadership style and his approach to business, and outlined how forest product companies can assess and manage political risk. He also highlighted four challenges facing Canadian producers: tariffs, duties, economic nationalist treatment of Canadian subsidiaries, and the impact of US-China trade tensions on lumber sales.
Since that series was published, many of those risks have materialized. The Trump administration has imposed the expected softwood lumber duties—higher than feared—and added a 10% Section 232 tariff. Combined, these measures amount to a staggering 45% levy on Canadian softwood exports. Meanwhile, lumber prices have remained low, production curtailments are mounting, and the sector is entering one of its most challenging periods in decades. While the Canadian government has provided interim support and is attempting to re-engage the US on a broader trade deal, lumber is not currently on the table. As a result, companies face not only a deepening financial crisis but a structural one.
With that context, we sought Robert’s perspective again—not as an extension of our earlier conversation, but as a fresh stock-taking and forward-looking reflection. His earlier analysis anticipated many of the outcomes now unfolding, and given what we now know—we asked him to weigh in on the core issues shaping the sector’s future and how Canadian companies can better prepare. In this new long-read feature, Robert addresses those questions head-on—offering his take on what may or may not change under the current US administration, the rise of protectionism and political risk south of the border, and the renewed China-US rift that continues to influence global markets. It’s a thoughtful, in-depth read for anyone trying to make sense of what comes next for Canada’s forest sector.
It’s been a tough year for the lumber trade. With US housing starts unusually low, demand and prices for lumber are down — even as trade costs, especially for Canadian producers, keep rising. …The president’s goal is straightforward: to bolster the domestic lumber industry — a move U.S. producers welcome. “This is our market. America first, baby,” says Andrew Miller, chair of the US Lumber Coalition. “I don’t think Canadians get that through their thick head. This is America, not Canada. There’s nothing that obligates us to take dumped subsidized product at the expense of US producers.” …Free market advocates see it differently: They say tariffs hurt consumers and that the added costs will eventually be passed through in the form of higher prices. They also doubt the U.S. lumber sector can replace Canadian boards in a timely fashion. …Even Miller said using national security as a reason was merely a “sideshow.”
BURNABY, BC — Interfor announced today revised operating plans for the fourth quarter of 2025. Due to persistently weak market conditions and ongoing economic uncertainty, Interfor will further temporarily reduce lumber production across its operations in British Columbia, Ontario, the US Pacific Northwest and the US South. These curtailments are expected to reduce lumber production in the fourth quarter of 2025 by approximately 250 million board feet, or 26%, as compared to the second quarter of 2025, which reflected a more normal operating stance. The curtailment volumes are approximately evenly split between Interfor’s Canadian and U.S. operations. …These curtailments are an amendment to Interfor’s previously announced curtailments on September 4, 2025. “Lumber prices in all regions of North America have continued to weaken, from already unsustainably low levels,” said Ian Fillinger, Interfor’s CEO. …While necessary, we fully recognize the impact these actions will have on our employees, contractors, suppliers and communities.”
The US imports about 40% of the softwood lumber the nation uses each year, more than 80% of that from Canada. President Trump says that the US has the capacity to meet 95% of softwood lumber demand and directed federal officials to update policies and regulatory guidelines to expand domestic timber harvesting and curb the arrival of foreign lumber. …As researchers studying the forestry sector and international trade, we recognize that the US has ample forest resources. But replacing imports with domestic lumber isn’t as simple as it sounds. There are differences in tree species and quality, and U.S. lumber often comes at a higher cost, even with tariffs on imports. Challenges like limited labor and manufacturing capacity require long-term investments, which temporary tariffs and uncertain trade policies often fail to encourage. In addition, the amount of lumber imported tends to mirror the boom-and-bust cycles of housing construction, a dynamic that tariffs alone are unlikely to change.
NEW YORK — Cabinet dealers, interior designers and remodeling contractors in the U.S. hope new tariffs on imported kitchen cabinets, bathroom vanities and upholstered wooden furniture will boost domestic production of those products. But several small business owners in the home improvement industry say they expect some short-term pains from the import taxes. Potential customers may postpone kitchen and bathroom renovations until costs — and the economy — seem more stable. …The American Kitchen Cabinet Alliance lobbied for tariffs to help offset what they described as a flood of cheap cabinets from countries such as Vietnam, Malaysia, China and elsewhere in the decades since manufacturing moved offshore. …Although the White House said the tariffs were intended to boost domestic production and protect U.S. businesses from predatory trade practices, some cabinet makers say that will be difficult because their supply chains are multinational.
President Trump’s new tariffs on imported lumber and wooden fixtures have taken effect, potentially raising the cost of home construction and renovations. …“These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs,” says NAHB Chairman Buddy Hughes. …According to an NAHB analysis, U.S. sawmills are operating at just 64% of their potential capacity, a figure that has dropped steadily since 2017. “It will take years until domestic lumber production ramps up to meet the needs of our citizens,” the trade group says”. …Framing costs, including the roof, averaged about $49,763 for new single-family homes last year, accounting for about 12% of the total cost of a new build, according to an NAHB breakdown. Cabinets and countertops cost $19,056 on average, accounting for 4.5% of the total, the analysis found. …Builder profit margins have already been shrinking, and many companies have pulled back on new construction.
The Mississippi Department of Environmental Quality permit board on Wednesday reversed a decision from earlier this year and granted wood pellet manufacturer Drax a permit that allows it to release more emissions from a facility in Gloster. The board held a two-day evidentiary hearing after denying the company the permit in April. The permit falls under Title V of the Clean Air Act and allows Drax’s facility Amite BioEnergy, to become a “major source” of Hazardous Air Pollutants, or HAPs. The board voted unanimously in favor of granting the permit said Kim Turner. Evidence from the hearing “sufficiently addressed” concerns the board previously had. MDEQ has found the facility in violation multiple times since Drax opened the Amite County plant in 2016. …Drax applied for the permit in order to better reflect its production capacity. Since violating the current permit, Amite BioEnergy has had to decrease its pellet output.
Lumber futures have risen about 19% from a low hit in early September, driven by the production cuts, hopes that declining interest rates will revive the housing market and Trump’s import tax. The 10% levy is on top of steep duties on Canadian lumber, which are adjusted annually in a heavily litigated process that is the result of a decades-long trade dispute. Those antidumping and countervailing duties rose in August to about 35% for most Canadian producers, up from roughly 15%. Canada’s sawmills are by far the largest source of softwood lumber from beyond U.S. borders, fulfilling about 24% of domestic consumption last year. Other significant importers of softwood lumber, the type used to frame houses, include Brazil and European countries such as Germany and Sweden. Homebuilders argue that import taxes will raise construction costs. U.S. lumber producers and timberland owners, however, urged Trump to enact a tariff.
With new tariffs taking effect on furniture and lumber, an analysis released by Goldman Sachs finds American consumers are paying for more than half of the cost of the levies imposed by President Donald Trump. In a research note to its clients, the global investment and banking giant said U.S. consumers will absorb 55% of tariff costs by the end of this year. American businesses would pay 22% of the costs, foreign exporters would absorb 18% and 5% would be evaded, according to the Goldman Sachs analysis. Consumers could end up paying 70% of the cost by the end of next year, the report said. “At the moment, however, US businesses are likely bearing a larger share of the costs because some tariffs have just gone into effect and it takes time to raise prices on consumers and negotiate lower import prices with foreign suppliers,” the analysis adds. 
In August, single-family permit activity softened, reflecting caution among developers amid persistent economic headwinds. This trend has been consistent for eight continuous months. On the multifamily front, permitting also cooled in August but remains in the positive territory. While single-family continues to bear the brunt of affordability headwinds, the multifamily space is showing tentative signs of rebalancing. Over the first eight months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 637,096. On a year-over-year (YoY) basis, this is a decline of 7.1% over the August 2024 level of 685,923. For multifamily, the total number of permits issued nationwide reached 330,617. This is 1.4% higher compared to the August 2024 level of 326,080. HBGI analysis indicates that this growth for multifamily development has been concentrated in lower density areas and among smaller builders.
In 2024, 17.5% of all new single-family homes started were custom homes. This share decreased from 18.8% in 2023 and from 20.4% in 2022, according to data tabulated from the Census Bureau’s Survey of Construction (SOC). The custom home market consists of contractor-built and owner-built homes—homes built for owner occupancy on the owner’s land, with either the owner or a builder acting as a general contractor. The alternatives are homes built-for-sale (on the builder’s land, often in subdivisions, with the intention of selling the house and land in one transaction) and homes built-for-rent. In 2024, 73.1% of the single-family homes started were built-for-sale and 9.3% were built-for-rent. At a 17.5% share, the number of custom homes started in 2024 was 176,932, falling from 177,850 in 2023.
Mass timber is gaining momentum as a structural material that, along with many other attributes, can reduce the embodied carbon in new buildings and retrofits. Despite this potential, and widespread enthusiasm in the design community, the uptake of mass timber has been relatively slow. Architecture 2030 and Pilot Projects Collaborative’s new report, 
As National Forest Products Week is observed each October, the US Endowment for Forestry and Communities is highlighting one of its partner programs that supports and advances US-based manufacturing. The Endowment is administering $5 million of the USDA Forest Service’s $80 million Wood Innovation Grants program, overseeing 18 individual projects across the country. Each project includes matching funds from subaward recipients, resulting in a total impact of approximately $10 million. Together, these investments will advance wood product manufacturing, strengthen forest management and foster energy innovation for timber-producing communities. …“Our forests are only as strong as the markets that sustain them. Through programs like the Wood Innovation Grants, we’re creating new opportunities for innovation while reinforcing the resilience of both ecosystems and the communities that depend on them. Strengthening U.S. wood products manufacturing is necessary to achieve these goals.”
HELENA, Mont. — The Montana Department of Natural Resources and Conservation (DNRC) has launched an online interactive map showing forest product manufacturers across the state. The new tool helps landowners, contractors, and community members locate nearby mills and connect with partners for forest management and wood processing projects. Each facility listing includes details such as product types, wood species used, and company size, with direct links to their websites. “Beyond helping Montanans find nearby mills, the map highlights manufacturing capacity that supports forest restoration, fuels reduction, and local jobs,” said Marc Vessar, DNRC forest practices program manager.
Western Colorado — Communities across the Western Slope need scientifically sound, effective action that actually helps protect our forests and communities. That’s why so many of us are paying attention to the Fix Our Forests Act, now moving through Congress. …The Act leans heavily on boosting logging, and yes, thinning trees in the right places can improve forest health. The problem is that an agenda driven by timber harvesting often causes companies to cut the largest-diameter trees to meet timber quotas set by Washington, D.C. Instead, restoration forestry is the science-backed solution that we really need. …There are real solutions to today’s forestry challenges. …We have the tools – they just need more funding and staff to do the job. …I urge our senators to do all they can to improve the bill before final passage, keeping the public at the table, as they the most to lose if we don’t get this right.
As the European Commission prepares a further postponement of its Deforestation-free Regulation (EUDR), proposals to simplify the law are abundant in Brussels. The undersigned organizations, representing the U.S. forestry and forest products sector value chain, urge the Commission to avoid a rushed process and take the time necessary to pursue simplification with great care. An additional year provides a valuable opportunity for the Commission to engage in productive dialogue with forest owners and operators in highly forested, low-risk countries like the U.S. to understand implementation challenges and reduce unintended consequences. “Simplifying a law as significant as the EUDR requires thoughtful and purposeful review,” said Eric Gee, executive director of the Southern Forest Products Association (SFPA). “A measured approach will help ensure that any changes both strengthen the law’s effectiveness and uphold fairness for producers in low-risk, sustainably managed regions like the Southeastern United States.”
BILLINGS, Montana — A federal judge on Wednesday dismissed a lawsuit from young climate activists seeking to block President Donald Trump’s executive orders promoting fossil fuels and discouraging renewable energy. U.S. District Judge Dana Christensen said the plaintiffs showed overwhelming evidence climate change affects them and that it will worsen as a result of Trump’s orders. But Christensen concluded their request for the courts to intervene was “unworkable” because it was beyond the power of the judiciary to create environmental policies. The 22 plaintiffs included youths who prevailed in a landmark climate trial against the state of Montana in 2023. …Legal experts said the young activists and their lawyers from the environmental group Our Children’s Trust faced long odds in the federal case. …The climate activists will appeal Wednesday’s ruling, said Julia Olson, chief legal counsel at Our Children’s Trust.
A study finds that replacing natural gas with electric and biomass power, along with improved energy efficiency, could help some pulp and paper mills reach zero net emissions. Researchers began with a simulation of mills defined by two characteristics: whether they used virgin or recycled fibers, and whether they were integrated or not. A virgin mill creates pulp and paper from fresh wood… while a recycled fiber mill re-uses fibers which may have been previously processed. A mill is considered integrated if it has the capability to turn wood and other biomass into pulp and paper on site, whereas a non-integrated mill uses pulp produced and dried off site. …The final strategy researchers analyzed was the use of low-carbon alternatives, like using waste wood in boilers instead of fossil fuels. The effectiveness changed depending on whether or not the mill was integrated, but all types saw reductions in greenhouse gas emissions.
GLOSTER, Miss. — A group of Gloster residents has filed a federal lawsuit against Drax Biomass and its subsidiaries, alleging that the company’s Amite BioEnergy wood pellet facility in the town has unlawfully released massive amounts of toxic pollutants into their community, violating the federal Clean Air Act and Mississippi law. According to a statement from the law firm that filed the claim, Singleton Schreiber, the lawsuit seeks “injunctive relief, civil penalties, and damages for the harm plaintiffs have suffered, including diminished property values, and the loss of safe use and enjoyment of their homes.” Drax responded to inquiries with the following statement: “We are aware of the lawsuit filed in Mississippi. While we cannot comment on the details of ongoing legal matters, our commitment to the communities where we operate remains unchanged. We strive to be a good neighbor in our communities and to support their wellbeing and prosperity.”