Canada and US May Reach Softwood Lumber Deal in Trade Talks

Canada and the US may reach a deal on softwood lumber disputes as part of trade negotiations, according to BC Premier David Eby. The prime minister is set to brief premiers on the state of talks on Tuesday. Eby believes there may be an opportunity to strike a deal, but no further details have been announced.

Canada and the United States may be on the cusp of resolving the long-standing softwood lumber dispute as part of ongoing trade negotiations, according to British Columbia Premier David Eby. Prime Minister Mark Carney is set to brief premiers on the state of talks this Tuesday, with Eby expressing optimism about the potential for a deal.

The softwood lumber dispute has been a persistent issue between the two countries, with the U.S. accusing Canada of unfairly subsidizing its lumber industry through low-cost public land harvesting fees. Canada denies these allegations and has been legally challenging the U.S. levies on lumber, which amount to billions of dollars in duties.

Eby has suggested that there may be an opportunity to include quotas on Canadian softwood lumber exports as part of a larger trade deal. This proposal comes as the U.S. is preparing to double various duties to 34.45% on Canadian softwood lumber, with a potential increase in tariffs to 35% by August 1 on non-compliant goods. Carney has agreed with Eby's idea, noting that resolving the lumber dispute could "build momentum" for a larger, more comprehensive trade deal [1].

The lumber industry is a significant economic driver for Canada, particularly in British Columbia, which accounts for about 40% of the country's softwood lumber exports to the U.S. [2]. The industry has been struggling, and artificial export limits could further damage it. However, both governments have been open to discussing quotas as a potential solution to stabilize access to affordable building materials for Americans and secure jobs for Canadian workers [3].

Carney has emphasized that resolving the lumber dispute is a top priority, but he has also noted that both issues are unfolding along different timelines. The U.S. has been imposing high tariffs on various goods, including Canadian lumber, as part of its broader trade strategy [4].

The potential softwood lumber deal is just one aspect of the ongoing trade negotiations between Canada and the U.S. Carney's government has already met several of President Trump's demands, including an immediate increase in defense spending and the elimination of Canada's digital services tax. However, Trump has continued to threaten additional tariffs on Canadian goods, including lumber.

The trade talks are complex and involve a range of issues, but the softwood lumber dispute is one of the most pressing. With time running out before the U.S. duties on Canadian lumber are set to rise significantly, both countries are under pressure to reach a resolution.

References:
[1] https://treefrogcreative.ca/a-trade-deal-with-the-us-could-include-lumber-quotas-carney-says/
[2] https://ca.finance.yahoo.com/news/carney-confirms-possibility-lumber-quotas-191836506.html
[3] https://www.bloomberg.com/news/articles/2025-07-16/trade-war-canada-weighs-lumber-quotas-to-solve-us-dispute-bc-premier-says
[4] https://www.marketscreener.com/news/latest/Carney-says-US-deal-that-works-for-Canada-isn-t-on-table-yet-50527256/