The Trump Administration has concluded that lumber imports threaten national security so much that they should have a 10% tariff imposed on them — a tariff that, for Canadian lumber, comes on top of the duties already imposed.
“The Secretary [of Commerce] found that present quantities and circumstances of wood product imports are weakening our economy,” President Trump said in a Sept. 29 proclamation, adding later: After considering the Secretary’s report, the factors in section 232 (19 U.S.C. 1862(d)), and other relevant factors and information, I concur with the Secretary’s finding that wood products are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.”
Trump's proclamation involves more than a 10% tariff on imports of softwood timber and lumber. It also slaps a 25% tariff on imports of certain upholstered wooden products as well as on imports of completed kitchen cabinets and vanities as well as parts imported for use in those kitchen cabinets and vanities.
The increases go into effect on Oct. 14. Also, starting Jan. 1, 2026, the duty rate on upholstery will rise to 30% and the rate on kitchen cabinets will increase to 50% unless the exporting countries involve reach trade agreements with the U.S.
While the Section 232 review involves global imports of lumber, the greatest impact is is expected to be on Canadian wood. In July and August, the Commerce Department’s International Trade Administration announced its latest review of Canadian lumber merited imposing antidumping (AD) and countervailing duties (CVD) ranging from 26.47% for West Fraser to 47.59% for Canfor, with all other mills paying 35.16%.
Any penalties imposed as a result of Section 232 would come on top of those duties. In a Sept. 9 letter to Commerce Secretary Howard Lutnick and to U.S. Trade Representative Jamieson Greer, the U.S. Lumber Coalition asked for penalties that hurt.
“The tariffs imposed should be high, they should be stacked on top of any other tariffs and AD/CVD duties, and they should remain in effect for at least four years,” the Coalition’s letter said.
Antidumping and countervailing duties are meant to increase the cost of Canadian lumber so that the price of their fiber is on more equal footing with U.S. mills’ production costs. In contrast, Section 232 penalties are based on political viewpoints, such as whether it’s in America’s self-defense interests to have a timber industry that can support the country’s housing and military needs. This difference puts Section 232 investigations more in line with attempts by President Trump to use tariffs as ways to persuade foreign governments to do things, such as buy less oil from Russia or persuade businesses to build factories in the U.S.
To date, tariffs’ impact on Americans has been less than originally expected. This is in part because companies have done a lot of maneuvering to avoid tariff pain, such as by shipping in as many goods as possible earlier this year, when tariffs were paused to provide time to negotiate new terms with dozens of countries.
Similarly, it’s widely believed that substantial volumes of Canadian lumber — a so-called “Wall of Wood” — moved south into U.S. reload centers and other sites before the new duties were imposed.
Eventually, those extra-large shipments of Chinese and other goods, along with the wood piled up in the U.S., will run out. At that point, whatever is brought in will carry higher prices. The question then is whether the U.S. economy will be robust enough for people to want to pay those prices.
The Federal Reserve’s decision Sept. 17 to cut short-term rates by a quarter point came after substantial disagreement among Fed officials over when and by how much rates should fall. That’s because the agency wants to help a weak jobs market but hasn’t pushed the annual inflation rate down to its 2% target.
“It’s not a bad economy or anything like it,” Fed Chairman Jerome Powell said. “But from a policy standpoint … it’s challenging to know what to do.”
Moody’s described the economy as being “on the precipice of a recession” even though the Atlanta Fed’s GDPNow estimate points to 3.4% growth this quarter following a 3.5% gain in the second quarter. Productivity growth from artificial intelligence could help keep the economy bubbly, it said. So would lower tariffs and looser immigration policy, it added.
Consumer spending is a huge driver of the economy, and on that front a survey by the New York Federal Reserve has disturbing news. Three times a year, it asks Americans to say whether they made any big remodeling expenditures in the previous four months and/or plan any such expenditures in the coming four months. Between May and August, 22.8% of respondents earning $50,000 to $100,000 annually said they spent on repairs and remodeling. But for September through December, only 15.3% will do the same. And among people making over $100,000 a year, the decline goes from 26.6% saying they spent money over the summer to just 21.4% who plan on remodeling and repair expenses this fall and winter.
Looking even further ahead, Harvard University’s Joint Center for Housing Studies issued updated forecasts that suggested household growth will slow over the next 20 years. We have about 134 million households today. Depending mainly on immigration rates, that number will rise by as little as 7 million or as much as 12 million by 2035.
About the Author
Craig Webb is a nationally recognized expert in the lumber and building materials industry, known for his deep insights into dealer and distributor operations across the U.S. As President of Webb Analytics, he provides strategic consulting, custom research and industry analysis to help manufacturers, distributors and investors navigate market trends and challenges. With a journalism degree from Indiana University and decades of editorial leadership — including 12 years as editor-in-chief of ProSales magazine — Webb has built a reputation as a trusted voice through his writing, speaking engagements and creation of the ProSales 100 Conference. His career spans influential roles at The Wall Street Journal, McGraw-Hill, American Banker and UPI and he’s visited dealers in 49 states and multiple countries to stay closely connected to the industry’s pulse.