U.S. hikes duty on Canadian softwood lumber to 17.9% — twice the old rate

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Various Canadian governments and lumber industry officials are expressing dismay that the US has decided to move forward with plans to double the amount of duty charged on softwood lumber from Canada.

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On Wednesday, the US Commerce Department said it would move to impose an average tariff of 17.9 percent on softwood lumber imported from Canada. This is more than double the previous rate of 8.99 per cent.

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In May, the US government said it planned to raise the rate to 18.32 percent, but after further analysis over the summer the agency decided to reduce that plan, but still double the levy.

The US maintains that Canadian lumber producers dump their produce into the US at a lower cost than US lumber companies because they are subsidized. So the US imposes tariffs on all softwood lumber from Canada to raise its price at the retail level, which encourages consumers to buy American lumber.

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Canada has long denied those allegations, and various trade tribunals have found favor with Canada on the matter.

“Every step of the way, the decisions have found Canada to be a fair trading partner,” International Trade Minister Mary Ng said in a news release, in which she expressed that Ottawa was “disappointed” in the decision.

“The United States has long relied on Canadian wood products to meet its domestic needs for high-quality building materials,” Ng said. “These unfair duties harm Canadian communities, businesses and workers. They are also a tax on American consumers, raising the cost of housing, renovation and rent at a time when housing affordability is already a significant concern for many. subject is.”

Not all wood will cope with the same duty

According to official government figures, Canada exports around $8 billion worth of softwood lumber to the world every year. The US is its largest single buyer.

Ng says Canada will continue to protect the industry from unfair tariffs, including litigation under the North American trade deal CUSMA, its predecessor NAFTA, and the World Trade Organization. As recently as the summer of 2020, the WTO ruled in Canada’s favor on the matter.

Not all Canadian lumber will face the same fee, as the US alleges that different companies are subsidized at different levels. The final rates are as follows:

  • Canfor Corp., 19.54 percent.
  • West Fraser Timber Company, 11.12 percent.
  • Resolute Forest Products Inc., 29.66 percent.
  • JD Irving, 15 percent.

All these rates are slightly lower than the rates proposed in May, but well above the earlier levels.

provincial responses

The British Columbia Lumber Trade Council says the tariffs do not make sense because the US does not produce enough softwoods to meet its demand.

Council President Susan Yurkovich said, “Our strong expectation is that American industry will end this decades-long litigation and instead work with us to meet the demand for low-carbon wood products, including those in the U.S. Families are also involved.”

“Until then, we will continue to vigorously defend our industry against these baseless allegations.”

Alberta Agriculture, Forestry and Rural Economic Development Minister Nate Horner said the high tariffs are completely unacceptable.

“Any tariffs unfairly target our softwood lumber exports and these falling and then rising rates create uncertainty on both sides of the border,” he said in a news release.

New Brunswick Premier Blaine Hicks also expressed disappointment at the decision. “We are deeply disappointed by the US government’s decision to raise these unfair and unreasonable tariffs against the export of softwood lumber to New Brunswick,” he said.

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