Lumber and wood outlook: tariffs step up on Jan. 1
Lumber prices are up on the year, Section 232 duties apply to wood products and cabinet and furniture rates rise on Jan. 1. How the wood market works and what it means for pallets, packaging and furniture.
Check how pallet, crating and furniture suppliers price wood content and duty, and confirm country of origin.
◷ Before the Jan. 1 tariff increaseKey takeaways
- Lumber producer prices were up 7.6% on the year through August.
- Section 232 duties apply to softwood lumber at about 10% and to cabinets, vanities and upholstered furniture at 25%.
- Cabinet and vanity rates are scheduled to rise to 50%, and upholstered furniture to 30%, on Jan. 1, 2027.
- EU deforestation rules covering wood take effect Dec. 30, 2026 for companies selling into Europe.
- Our move: check how pallet, crating and furniture suppliers price wood content and duty, and confirm country of origin.
How the wood market works
Lumber is a classic commodity: sawmills sell dimensional lumber and panels at market prices that can swing widely with housing demand, weather, wildfires and mill closures. Most procurement teams buy wood indirectly, as pallets, crates, packaging, furniture, cabinetry and fixtures, so the effect arrives through supplier price changes rather than lumber quotes.
The U.S. imports a significant share of its softwood lumber, mainly from Canada, and a large share of furniture and cabinetry from Asia. That makes trade measures a big part of the category’s cost.
What is driving prices now
Tariffs. Section 232 duties on wood products took effect Oct. 14, 2025: about 10% on certain softwood timber and lumber, and 25% on certain upholstered wooden furniture and kitchen cabinets and vanities. Increases to 30% and 50% were delayed by a year and are now scheduled for Jan. 1, 2027, as our tariff coverage explains.
Prices. Lumber producer prices were up 7.6% on the year through August, according to our Cost Pressure Monitor.
Regulation abroad. EU deforestation rules take effect Dec. 30, 2026 for wood and wood products sold into the EU.
Where the negotiating leverage sits
Balanced. Lumber is not short, so pallet and packaging buyers have options. For imported cabinets and furniture, the Jan. 1 increase shifts leverage toward domestic suppliers, whose quotes become more competitive.
Supply risk: what could go wrong
- Tariff step-ups on Jan. 1, or changes through country agreements.
- Wildfires and mill closures that tighten regional supply.
- Documentation gaps for EU-bound wood under the deforestation rules.
How to buy it now
- Check pallet and crating contracts for how lumber changes pass through.
- Classify furniture and cabinetry against the proclamation to confirm which rate applies.
- Decide on pull-forward imports before Jan. 1 using a holding-cost break-even.
- Re-quote domestic suppliers for 2027 cabinet and furniture projects.
- Collect origin data for wood sold into the EU.
What to watch
- Country agreements or another delay before Jan. 1.
- Monthly lumber prices.
- EU guidance on the deforestation rules.
Price trend
U.S. producer price index for lumber (BLS series WPU081), data through Aug 2026. Tariff note: Section 232 tariffs on wood products are in effect. Full price history.
Our coverage of lumber and wood
- Kitchen cabinet and vanity tariffs are set to double to 50% on Jan. 1, with upholstered furniture rising to 30%A one-year delay of the Section 232 wood products increases ends Dec. 31 unless more countries reach agreements. Procurement teams buying furniture, fixtures and cabinetry for 2027 projects should price the higher rates now.
- EU deforestation rules apply Dec. 30: what U.S. companies selling into Europe need from suppliers of cocoa, coffee, soy, wood and rubberMedium and large companies placing covered products on the EU market must show they are deforestation-free and legally produced, with geolocation data from origin. Recent changes put most of the burden on the first company to place goods on the market.
Questions procurement teams ask
What tariffs apply to wood products in 2026?
Under Section 232, about 10% on certain softwood timber and lumber and 25% on certain upholstered wooden furniture and on kitchen cabinets and vanities. The furniture rate is scheduled to rise to 30% and cabinets and vanities to 50% on Jan. 1, 2027.
How do lumber prices affect pallets and packaging?
Wood is the main material cost in pallets and crates, so pallet suppliers usually pass lumber changes through. Ask how your contract handles wood cost changes.
Does the EU deforestation regulation apply to wood?
Yes. From Dec. 30, 2026, wood and wood products sold into the EU need due diligence statements with geolocation of where the wood was harvested.
Sources
- Procurement Signal — Wood and furniture tariffs
- Procurement Signal — EU deforestation rules
- Procurement Signal — Input-cost pressure report
- Procurement Signal: Canada Section 338 list changes
- U.S. Bureau of Labor Statistics via FRED — Lumber (WPU081)
Leverage, supply risk and the recommended move are Procurement Signal's editorial assessment, built from the sources above. This is general market analysis, not advice on a specific contract. See our editorial standards.