US-Canada trade negotiations have collapsed after both sides appeared close to an agreement, triggering new 50% US tariffs on around $20 billion of Canadian imports. Selected wood, panel, paper and value-added forest products are included, adding to the trade restrictions already affecting Canada's forest industry.<\/p>\n
The United States imposed the duties at 12:01 a.m. Eastern Time on August 22 after last-minute negotiations with Ottawa failed, ending a three-day reprieve granted on August 18 when Washington postponed the original August 19 deadline amid indications that an agreement was close.<\/p>\n
Canadian Prime Minister Mark Carney suspended the talks and ordered the negotiating delegation home after rejecting US demands presented during the final stages of discussions. Canada has announced retaliatory tariffs of equivalent value on US goods from September 8.<\/p>\n
Selected forest products face 50% duty<\/strong><\/p>\n The tariffs were imposed under Section 338 of the US Tariff Act of 1930 and cover around $20 billion of Canadian exports, including selected wood products, panels, plywood, pulp and paper products and wooden furniture. Covered goods can be subject to the additional duty even when they would otherwise qualify for preferential treatment under the US-Mexico-Canada Agreement.<\/p>\n Products already subject to Section 232 tariffs are excluded from the new Section 338 duties, meaning that much of Canadian softwood lumber will not have another 50% tariff added to its existing US duties.<\/p>\n Canadian softwood lumber already faces several layers of tariffs. Since October 2025, the United States has imposed a 10% Section 232 tariff on certain softwood lumber and timber imports, on top of longstanding anti-dumping and countervailing duties.<\/p>\n Current combined anti-dumping and countervailing cash deposit rates stand at 47.59% for Canfor, 26.47% for West Fraser and 35.16% for most other companies covered by the latest administrative review, with the 10% Section 232 tariff added where applicable.<\/p>\n Canadian forest products outside the Section 232 regime but listed in the Section 338 schedules can now face the new 50% duty, leaving tariff exposure heavily dependent on the individual customs classification.<\/p>\n Agreement collapses after three-day extension<\/strong><\/p>\n Washington had initially planned to introduce the tariffs on August 19 but postponed implementation until August 22 as negotiations continued. Ottawa had indicated that it was prepared to remove remaining retaliatory tariffs on several US products if Washington substantially reduced its own measures.<\/p>\n Carney said the US introduced additional demands during the final stage of negotiations that Canada was unwilling to accept, while Washington has accused Ottawa of abandoning terms that US officials considered largely settled. No date has been announced for a resumption of the talks.<\/p>\n Canada plans to respond from September 8 with tariffs matching the value of the US measures and covering a range of American goods.<\/p>\n More pressure on Canadian forest-product exports<\/strong><\/p>\n The latest action leaves Canadian forest-product exporters operating under several overlapping US trade measures, with softwood lumber primarily affected by anti-dumping and countervailing duties and Section 232 tariffs, while selected panels, plywood, paper, wood products and wooden furniture outside the Section 232 scope can be caught by the new Section 338 duties.<\/p>\n Section 338 is a rarely used provision of the Tariff Act of 1930 that allows the US president to impose additional tariffs of up to 50% when another country is deemed to discriminate against US commerce. The measures introduced against Canada have no predetermined expiry date and can remain in force until they are modified or withdrawn.<\/p>\n The breakdown of the negotiations comes as the two countries prepare for larger discussions over the future of the USMCA, while Canadian forest-product producers already face some of their highest barriers to the US market in decades.<\/p>","protected":false},"excerpt":{"rendered":" US-Canada trade negotiations have collapsed after both sides appeared close to an agreement, triggering new 50% US tariffs on around $20 billion of Canadian imports. Selected wood, panel, paper and value-added forest products are included, adding to the trade restrictions … Continue reading