AR7 Kicks Off: Softwood Lumber Duties Locked Until 2026

Impact on Your Procurement Strategy

The initiation of the Seventh Administrative Review (AR7) on February 21st, covering shipments from January 1, 2024, through December 31, 2024, is standard procedure and does not trigger an immediate change in the cash deposit rates for Canadian softwood lumber. Therefore, the immediate impact on spot pricing for framing products like Western SPF and Hem-Fir is expected to be minimal.

However, this procedural confirmation is critical because it solidifies the continuation of the primary risk factor for importing Canadian dimensional lumber: retrospective duty liability. The Department of Commerce stated that the final rates for this review period will be determined not later than January 31, 2026. This means that distributors importing Canadian lumber now or throughout 2025 are still operating under a cloud of uncertainty regarding their final cost basis for lumber purchased in 2024. If the final AR7 rate is higher than the cash deposit rate paid during that period, importers will face a significant, retroactive duty bill.

For procurement managers, this mandates a disciplined, risk-averse inventory strategy. You must treat the current cash deposit rate as a floor, not a ceiling, and allocate financial reserves specifically to cover potential duty true-ups. This long review timeline—extending into early 2026—will continue to influence Canadian mill behavior, potentially keeping supply slightly constrained as producers manage their own duty risk exposure. Buyers relying heavily on Canadian studs and dimensional lumber (2x4, 2x6) should prioritize supply chain security.

Actionable strategy involves increasing supply diversification. While Canadian SPF remains essential for certain applications, distributors should actively increase purchasing volumes of US-South SYP, which is duty-free, to reduce overall exposure to the ongoing trade dispute risk. Furthermore, review all current and future contracts with Canadian suppliers to ensure clear, unambiguous language defining the responsibility for any retrospective duty adjustments resulting from the AR7 ruling expected in 2026. This ongoing policy uncertainty ensures that trade negotiation news will drive volatility in the dimensional lumber market alongside housing starts data.

Key Takeaways

• No immediate price volatility from the AR7 initiation; focus remains on maintaining duty reserves due to the January 31, 2026, final ruling date.

• Mitigate risk by diversifying supply: increase reliance on US-South SYP or domestic production to reduce exposure to Canadian duty liability.

• Review contracts now to ensure clear allocation of responsibility for retrospective duty bills resulting from the AR covering 2024 shipments.

• The long timeline ensures trade policy remains a key volatility driver for SPF pricing throughout 2025 and early 2026.

Market Outlook

Pricing Trend: STABLE Confidence Level: MEDIUM Recommended Action: Treat current Canadian duty rates as a minimum cost. Maintain financial reserves (duty set-aside) equivalent to the difference between the lowest and highest historical duty rate until the January 31, 2026, final ruling clarifies retrospective liability.

How LumberFlow Helps

This ongoing duty uncertainty makes accurate landed cost calculation essential. Use LumberFlow's quote comparison dashboard to factor in variable duty amounts and compare true all-in pricing between Canadian SPF and domestic SYP suppliers instantly.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.