WASHINGTON, D.C. — The Trump administration is slapping hefty duties on billions of dollars of lumber imported from Canada, marking an escalation of trade tensions ahead of the president’s promised effort to overhaul the North American Free Trade Agreement.

The U.S. softwood lumber industry has long complained that competing imports from Canada are subsidized by provincial governments, giving Canadian lumber firms an unfair pricing advantage.

Softwood lumber is used primarily for home building. Imports from Canada today account for about one-third of the market in the U.S.

The Commerce Department, in announcing its preliminary ruling late Monday, said that so-called countervailing duties ranging from 3 percent to 24 percent would be applied retroactively on five Canadian lumber exporters.

Overall the duties would average about 20 percent and could amount to a total of around $1 billion. Additional penalties could be levied if the Commerce Department determines that Canadian lumber is being dumped into U.S. markets.

The National Association of Home Builders estimated that while the new tariffs would increase output for U.S. producers, they would add $1,236 to the price of an average single-family home and lead to a loss of nearly $500 million in wages for American workers.

“This will have an impact on housing,” said Robert Dietz, chief economist at the home builders’ group.

U.S. lumber representatives disputed that the duties would have a material impact on home prices. They applauded the Trump administration action, saying that enforcing fair trade laws and leveling the playing field could increase the domestic industry’s employment.

About 360,000 people work in sawmills and other jobs linked to the industry, such as truckers hauling wood, according to the U.S. Lumber Coalition.

The dispute over softwood lumber between the two countries spans decades. American lumber mills complain that most of the timber used by Canadian rivals is bought from government forests at below-market prices.

The U.S. lumber industry filed a complaint last fall with the Commerce Department after a year of unsuccessful negotiations between U.S. and Canada following the expiration of a bilateral agreement on softwood lumber.

The investigation was initiated under the Obama administration, and the Commerce Department’s ruling was issued Monday to meet the deadline for reporting a preliminary finding on the case.

The Canadian government called the new duties “unfair and punitive,” and said the industry would challenge the ruling through legal avenues. Canadian officials argued that the tariffs would hurt U.S. home builders and ultimately American consumers.

Zoltan van Heyningen, executive director of the Lumber Coalition, called that claim “completely bogus.” He said only 2 percent of the cost of an average $343,000 new house stems from lumber materials.

While the U.S. and Canada have had understandings on lumber apart from NAFTA, the new duties have heightened tensions that were already rising amid sharp rhetoric by Trump and his senior officials critical of NAFTA, first focused on Mexico and more recently on Canada.

In a tweet Tuesday, Trump railed against Canada’s protected dairy industry. “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!” he said.

Opening Canada’s dairy market is expected to be a major issue of contention in the NAFTA renegotiations.

Another sticking point with Canada that was touched on in the lumber case has to do with how disputes are settled. A provision in NAFTA allows parties to turn to a five-member panel to resolve disputes.

In commenting on the lumber duties, Wilbur Ross, Trump’s commerce secretary who is expected to take a leading role in the NAFTA talks, said that Canada unduly benefits from this provision, which the Trump administration has indicated it wants to eliminate.

Ross, in a statement late Monday, referred to both the complaint on dairy and the new lumber duties, saying: “It has been a bad week for U.S.-Canada trade relations. … This is not our idea of a properly functioning free trade agreement.”

Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, welcomed the administration’s ruling. His constituents in the Pacific Northwest had been among those pushing for tougher enforcement on Canadian lumber.

This “announcement sends the message that help is on the way,” he said.