The U.S. is in the midst of negotiations with Canada over an agreement on Canadian lumber imports. Many U.S. sawmill owners argue that the Canadian mills receive government subsidies on government-owned lands, making it difficult for the U.S. market to compete. The 2006 softwood lumber trade agreement, meant to level the playing field, expired last year and a one-year freeze on tariffs, a tax on imported goods and services, ends in October. The uncertainty of new tariffs is affecting Southeast timber.
The U.S. and Canadian governments have been at odds for decades on whether Canadian sawmills receive government subsidies, particularly “stumpage” fees, a tax on harvested trees. Mills in the states say that gives Canadian producers an unfair advantage in the U.S. market.