New U.S. tariffs, introduced Aug. 22, are broadening the trade pressures facing Canada’s secondary wood manufacturing sector. The measures now reach beyond previously tariffed finished products into selected furniture, millwork, panels and cutting tools. Canada has responded with counter-tariffs on U.S.-origin wood products, hardware and other goods, creating new costs on both sides of the border.

Effective Aug. 22, the United States began applying an additional 50 per cent tariff to a specified list of Canadian goods. For the wood industry, the new list reaches into furniture, architectural millwork, panels and cutting tools, including:

• mouldings/profiled wood;
• certain MDF/fibreboard;
• plywood/veneered panels;
• wooden doors;
• other manufactured wood;
• steel-working-part circular saw blades;
• carbide/cermet inserts and tips;
• bedroom furniture;
• other wooden furniture; and
• selected non-wood furniture parts.

The panel measures are highly classification-dependent. Particleboard, including many melamine- and TFL-faced particleboard products, is not included. However, certain other board products and numerous plywood, veneered and laminated-panel classifications are subject to the additional tariff.

This creates a significant distinction within the decorative-panel market. Products that may serve similar applications can now receive very different tariff treatment depending on their substrate and customs classification.

Tooling is similarly selective. Steel-working-part circular saw blades and unmounted carbide or cermet inserts are subject to the 50 percent tariff, while finished woodworking router bits and conventional woodworking machine knives are not broadly included.

The inclusion of carbide inserts comes at a particularly difficult time for cutting-tool users. Global tungsten carbide supplies are already under pressure, with constrained availability and higher costs associated with Chinese export controls and strong demand from manufacturing, aerospace and defence markets. Adding a 50 per cent tariff to Canadian carbide inserts entering the U.S. could further increase tooling costs and exacerbate the effects of the existing carbide shortage.

The new tariffs also extend significantly further into finished wood products. Selected bedroom furniture, other wooden furniture, non-wood furniture components, wooden doors, mouldings and other manufactured wood products can now face an additional 50 percent duty when exported from Canada to the U.S.

Canada responds

Canada announced a new round of counter-tariffs on Aug. 25, scheduled to take effect Sept. 8. The measures apply to $27.6 billion in U.S.-origin imports and use tariff rates of 15, 25 and 50 per cent. Several categories are directly relevant to Canadian secondary wood manufacturers, including:

• selected softwood lumber – 25 per cent;
• plywood/veneered/laminated panels – 50 per cent;
• wood screws – 50 per cent;
• hinges – 25 per cent;
• furniture fittings – 25 per cent;
• upholstered wooden-frame seating – 25 per cent;
• other wooden-frame seating – 50 per cent;
• kitchen furniture – 25 per cent;
• bedroom furniture – 50 per cent;
• other wooden furniture – 50 per cent; and
• wooden furniture parts – 25 per cent.

Canada did not mirror the U.S. measures product-for-product. Particleboard and MDF are absent from the new Canadian list, as are steel circular saw blades, carbide inserts and router bits.

For Canadian manufacturers, the counter-tariffs create both protection and new input-cost pressures. U.S.-origin plywood will face a 50 per cent tariff, while hinges and other furniture fittings will face 25 per cent and wood screws 50 per cent. Manufacturers dependent on U.S.-origin hardware or panels may therefore see higher costs even as Canadian producers gain greater protection against competing U.S. products.

The asymmetry between the two countries is especially notable in panels and tooling. The U.S. has targeted selected Canadian MDF and carbide inserts, while Canada has focused more heavily on plywood, hardware and finished furniture.

Future uncertainty

The next major U.S. development could come after Oct. 1, when the U.S. commerce secretary is required to report to the president on hardwood timber and lumber imports, market conditions and the domestic industry. The deadline does not automatically trigger a tariff. However, the review could lead to additional Section 232 duties on hardwood timber and lumber.

For secondary manufacturers, the greater concern may be the explicit possibility of tariffs on hardwood “derivative products.” Depending on how broadly that term is eventually defined, future measures could reach additional flooring, millwork, furniture, cabinetry and other value-added wood products.

The immediate tariff picture is therefore becoming considerably more complex. The new U.S. 50 per cent tariffs reach selected materials, tooling and finished wood products, while Canada’s retaliation targets many of the U.S.-origin panels, hardware and furniture products used or sold within the Canadian market.

Tyler Holt is the editor of Wood Industry, a publication focusing on the business side of woodworking, where the preceding article was originally published.