Canada/U.S. trade tensions are boiling over again with threatened tariffs that would devastate a corner of the forest sector previously unscathed by punitive duties over the softwood lumber dispute
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A niche corner of B.C.’s forest sector that had been flying under the radar of U.S. tariffs and trade wars is now staring down a deadline for a crushing blow in the next round of charges announced by U.S. President Donald Trump.
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Those new charges, announced last week, would slap a 50 per cent tariff on $28 billion of Canadian exports including B.C. plywood, veneers and plywood panels starting Aug. 19, leaving producers short on strategies to adjust.
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“(We’re) just hoping that Trump is flip-flopping again,” said Bhavjit Thandi, chief financial officer of Richmond Plywood. “Sometimes that’s what you’ve got to do.”
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Given that Trump has a reputation for changing positions, Thandi said he and his colleagues have hope that some kind of extension will be offered before the deadline. Otherwise, the tariffs would likely cut off the U.S. export market.
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Thandi said Richmond Plywood sells most of the output of its 450-employee mill at Vulcan Way and No. 6 Road into the Canadian market, but the 10 to 12 per cent it has been shipping into the U.S. represents its best and highest-value product.
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“Our margins are like five, 10 per cent max,” Thandi said. “It’s a low-margin, high output business. I don’t think those U.S. buyers are going to pay a 50-per-cent markup and we can’t afford to absorb the 50-per-cent markup.”
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To Brian Menzies, executive director of the Independent Wood Producers Association, the threatened tariffs add insult to injury for his members that have been struggling for almost a decade under the punitive duties of the Canada-U.S. softwood lumber dispute.
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Softwood lumber isn’t included under the Canada, U.S., Mexico Agreement (CUSMA), the free trade deal that Trump negotiated to replace the North American Free Trade Agreement in his first presidential term.
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On lumber, B.C. producers have been paying duties on exports since 2017, which stand at an average 45 per cent in 2026. An annual readjustment could see the levies reduced to an average 35 per cent later this year.
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Now, Menzies said the threatened additional tariffs hit “a lot of little things that people were still kind of happy they can make money on. All of a sudden, bang, there’s this wall coming up.”
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Trump cited the ban on sales of American-made liquor and wine by eight provinces, including B.C., as one of the irritants that sparked this particular tariff threat. The executive order spelling out the tariff timeline said liquor sales of U.S. brands had fallen 81 per cent because of the measure.
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Initial stories about the tariffs noted the seemingly random wide range of products targeted, from wine to cement, flower bulbs, furniture and hockey sticks.
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Digging deeper, however, particular wood products including softwood and hardwood plywood, wood veneers from peeled logs, laminated veneer lumber and medium-density fibreboard would be hit by the new tariffs.
