U.S. Trade Policies Protect Lumber, Hinder Semiconductors: Supply Chain Tensions Rise

The U.S. trade policies are increasingly shaping corporate strategies across diverse sectors, with recent developments in the lumber and semiconductor industries highlighting the ripple effects of regulatory shifts. West Fraser Timber Co. Ltd., a major Canadian wood products firm, reported a 10% Section 232 tariff on softwood imports to the U.S., effective October 14, 2025, adding to existing duties in West Fraser's third-quarter results. Meanwhile, Applied Materials Inc. (AMAT) faces a $600 million revenue hit in fiscal 2026 due to U.S. enforcement actions targeting Chinese firms evading chipmaking equipment restrictions, according to a TradingView report. These developments underscore the growing complexity of global supply chains and the financial risks tied to geopolitical policies.

West Fraser's third-quarter 2025 results revealed a $546 million cash and short-term investments balance, down from $641 million in December 2024, as the company navigated capital expenditures of $90 million and paid $25 million in dividends. The newly imposed tariffs, while providing short-term relief to domestic lumber producers, introduce long-term uncertainty. The company emphasized that the Section 232 investigation could lead to additional trade restrictions, compounding risks outlined in its 2024 Annual MD&A. Despite these challenges, West Fraser remains optimistic about North American housing demand, citing demographic trends and housing stock aging as drivers for lumber and engineered wood products.

In the semiconductor sector, Applied Materials' stock fell 0.93% on October 22, 2025, following its revenue forecast adjustment. The company attributed the hit to U.S. actions targeting Chinese firms using subsidiaries to bypass chipmaking equipment bans. This follows a broader trend of U.S. enforcement of export controls, which has disrupted global semiconductor supply chains. Analysts note that Applied Materials' struggles reflect the sector's vulnerability to geopolitical tensions, with the Nasdaq 100 index already showing signs of strain from similar announcements.

The contrasting challenges faced by West Fraser and Applied Materials highlight the sector-specific impacts of U.S. trade policies. While tariffs on lumber aim to protect domestic industries, they also risk retaliatory measures and supply chain disruptions. Conversely, semiconductor export controls, while addressing national security concerns, have accelerated industry consolidation and R&D shifts. Both cases illustrate how regulatory frameworks increasingly dictate corporate financial strategies, from capital allocation to market outlooks.