50% U.S. tariffs on B.C. wood products delayed three days

Up to $991 million in B.C. forest-product exports could be exposed if Canada-U.S. talks fail to produce a final agreement by Saturday

The United States has delayed new 50 per cent tariffs on a range of Canadian goods until Aug. 22 as trade negotiations continue.

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B.C. manufacturers facing a new 50 per cent U.S. tariff received an eleventh-hour reprieve Tuesday night after the United States postponed the measure for three days while Canada and the U.S. try to finalize a trade agreement.

The tariffs had been scheduled to take effect Wednesday, Aug. 19. A proclamation signed by U.S. President Donald Trump late Tuesday moved the effective date to 12:01 a.m. Eastern time on Saturday, Aug. 22.

Prime Minister Mark Carney confirmed the postponement, saying “substantial progress” had been made in weeks of negotiations, while cautioning that important work remained before an agreement was complete.

The delay leaves Canadian exporters with three more days of uncertainty over a sweeping tariff measure that reaches well beyond the dairy, alcohol and automotive disputes cited by the White House.

The threatened tariffs cover roughly US$20 billion in Canadian goods and would apply to listed products even when they would otherwise qualify for tariff-free treatment under the Canada-United States-Mexico Agreement.

For British Columbia, the potential impact is particularly significant for manufacturers of value-added forest products.

B.C. forestry consultant David Elstone, managing director of Spar Tree Group, analyzed 103 forest-product descriptions contained in the U.S. tariff lists and estimated that B.C. exported up to approximately $991 million in potentially affected forest products to the United States in 2025.

Elstone cautioned that the figure is an estimate because U.S. tariff descriptions do not always correspond precisely with Canadian export classifications.

His analysis identifies veneer as the highest-value B.C. forest product potentially exposed to the new tariff, followed by plywood. Select paper and packaging products accounted for about $123 million in exports on the affected lists, while laminated veneer lumber accounted for another $84 million.

That gives the dispute a direct West Kootenay connection.

Fruitvale-based ATCO Wood Products specializes in softwood veneer and says it supplies plywood and engineered-wood-product customers in Canada and the United States.

Veneer is one of the product groups identified by Elstone as potentially exposed to the new 50 per cent tariff. Whether individual ATCO shipments would be subject to the duty would depend on their specific U.S. tariff classifications.

The situation is different for the Boundary's largest forest-products operation.

Interfor's Grand Forks mill produces dimension lumber, according to the company.

Canadian softwood timber and lumber are excluded from the new Section 338 tariffs because they are already covered by separate U.S. Section 232 measures. They continue to face other U.S. tariffs and softwood-lumber duties, but the threatened 50 per cent Section 338 tariff is not simply being added to all lumber crossing the border.

That distinction is important because much of the new exposure falls on the value-added side of B.C.'s forest industry rather than conventional sawmill lumber.

Elstone's review identifies veneer, plywood, laminated veneer lumber, MDF, some paper products, furniture, mouldings and other manufactured wood products among those potentially affected.

His analysis found several other forest products, including newsprint, market pulp, oriented strand board, glulam and cross-laminated timber, outside the new Section 338 tariff lists.

The tariffs were announced in July under Section 338 of the U.S. Tariff Act of 1930. The Trump administration says Canadian policies governing U.S. alcoholic beverages, dairy products and motor vehicles discriminate against American commerce.

The White House said Tuesday that Canadian officials had indicated a willingness to address measures the U.S. considers discriminatory. Ottawa has not publicly confirmed the specific concessions described by Washington.

Canadian negotiators were returning to Ottawa Wednesday after holding daily talks with their U.S. counterparts in Washington, according to Reuters.

U.S. Trade Representative Jamieson Greer said the American side was confident an agreement had been reached in principle, but major details remain unresolved.

One of the central issues is the existing U.S. tariff on Canadian vehicles and auto parts. Canadian auto industry sources told Reuters that Ottawa is seeking a reduction to 10 per cent, while the U.S. has offered 15 per cent.

It is also not yet clear what concessions Canada has made on dairy, alcohol or other issues, or exactly what tariff relief Canadian industries would receive under a final agreement.

Trump has separately raised the possibility of reviving the long-abandoned Keystone XL pipeline, although there has been no confirmation that the pipeline is part of the trade agreement now being negotiated.

For B.C. manufacturers, the immediate change is more straightforward: a tariff expected Wednesday morning has been moved to Saturday.

Unless Canada and the United States finalize an agreement, the White House proclamation now calls for the additional 50 per cent duties to take effect at 12:01 a.m. Eastern time Aug. 22.

For value-added forest producers in the Interior and West Kootenays, that means the threat has been postponed — not removed.