West Coast Grows Concerned For New Countervailing Duties
By Zach Miller
At the time of this writing the wood products industry is in a rut. The optimism that was shared by most at the beginning of 2025 has rapidly diminished as we head into summer. Elevated interest rates, access to fiber, sporadic demand and potential tariffs on top of covid rate increases later this year are keeping buyers on the sidelines and manufacturers in a state of confusion. The following is what a few West Coast producers had to say.
Dean Garofano of Delta Forestry Group, Pitt Meadows, BC said, “Sales at Delta Forestry Group have been good and steady year to date, however, demand currently is not as strong as we would expect for this time of year. When asked, most of our distribution customers are aligned in saying sales have not been great but also quick to emphasize they have not been terrible. The common theme is that sales are moving along at an okay pace. It appears that the constant pattern of on again, off again tariff talk, along with the current in place tariffs has impacted consumer confidence. In general homeowners are more cautious when making decisions on moving forward with home construction projects which impact demand. Despite lower than usual spring demand we have barely kept up with enough logs to support our order file so supply and demand are not out of balance.”
Garofano continued, “Log availability here on the coast is unusually tight for this time of year for most species. With wildfire season on our doorstep, I do not expect availability to get much better before fall. Cedar logs have seen prices continue to creep upward on many sorts while lumber prices have stabilized. Hemlock sawlogs have also seen upward price pressure with unusually low inventories at mills and very little available for purchase. There are more logging projects coming online soon, so this should stimulate more log supply this fall. At the same time the duties are set to increase to 34.5 percent this September/October.”
Garofano finished with this, “It is logical to assume market demand will drop significantly this fall with the combination of winter and 34.5 percent duties. Sawmills will need to make some difficult decisions on purchases if they want to beef up log inventories heading into 2026.”
John McDowell of Oregon Industrial Lumber Products, Springfield, OR said, “Demand and supply are currently bouncing up and down. We see overall average demand, but it has been fluctuating up and down by market and product. Supply wise, Clears in most species remain somewhat tight. We deal in mostly Yellow Cedar and Douglas Fir in which Vertical Grain Clears, especially wider sizes, are tight. The Canadian and U.S. mills continue to push up the price and we are getting to the point that interest on the distributer/retail end are beginning to wane because of pricing. We have been luckier than most in that our supply of Yellow Cedar has been very consistent. However, I don’t believe that is the case with other species or suppliers. I expect an uptick in demand with the upcoming countervailing duties increases this September. I expect the same with pricing though there may be a bit of pushback that takes place at this time in early summer. By August prices will begin to increase for the upcoming duties.”
One source noted that many of his customers are cautious about the size of their inventories, with many limiting their inventory size to smaller amounts.
McDowell continued, “Customers’ moods are all over the place. In some markets they are swamped and in others they are slow, so we are receiving mixed messages. However, everyone seems to have the same idea about being careful when it comes to inventory size and cash on hand. Few people seem to be wanting to carry a larger or even average inventory. I believe this is due to continued increase in overhead that most manufactures are seeing and the uncertainty being created by our politics currently. I have heard that some mills are seeing some loosening in log supply on the Douglas Fir side but it is too early to tell. If there is it won’t be obvious until after the dust clears from the countervailing duty increases later this year. We should see an uptick in availability of material from Canada as everyone scrambles to bring down wood before the duty deadline.”
When asked about the possibility of a new Softwood Lumber Agreement being negotiated by the new administrations McDowell said, “I doubt that there will be a lot of change. I am polarized on this issue because I feel the decisions on this agreement are driven by timber land holders/companies in the U.S. who benefit from increasing the duties by increasing the market value of their own logs regardless of whether true competition from Canadian mills exists or not. Yellow Cedar is a great example, there is so little cut and milled in the U.S. due to most of it being tied up on Federal lands, yet it carries the same U.S. countervailing duties as Douglas Fir and Hemlock. The Softwood Lumber Agreement and duties had more positives than negatives back when it had a ceiling on amounts so that it was focused on the commodities that were being hurt by government subsidization.”
An unnamed BC manufacturer said, “We are noticing a good amount of demand for some of the more popular items, while there is not enough raw material supply to provide the demand. Other products from the same line are accumulating but don’t have much demand as of right now, hopefully that changes soon and products begin to move. As of right now it’s good and positive vibes, PO’s coming in with quick turn arounds for shipments. We will have to see what happens in a few months with the plan to increase the duties which will be a scene and not good for business.
“Log supplies are tight due to delayed permitting from higher authorities. Labor and transportation are okay, but the upcoming fire season will stop/delay logging which will cause supplies to drop even more.”
