U.S. Imposing Countervaling Duties on Canadian Imports

The U.S. Department of Commerce announced April 24 that it is placing countervailing duties on softwood lumber imports from Canada.

The U.S. Department of Commerce announced April 24 that it is placing countervailing duties on softwood lumber imports from Canada.

Most companies exporting Canadian softwoods into the U.S. will incur a rate of 19.88%. However, five producers were singled out for individual tariffs.

West Fraser Timber Co., Vancouver, B.C., will pay 24.12%; Canfor Corp., Vancouver, 20.26%; Tolko Industries, Vernon, B.C., 19.50%; Resolute Forest Products, Montreal, 12.82%; and J.D. Irving, St. John, N.B., 3.02%.

The action taken by the federal government was in response to a petition filed by the U.S. Lumber Coalition, a group representing American softwood lumber producers, alleging harm caused by unfair subsidies for the Canadian softwood lumber industry. The countervailing import duties are retroactive to Jan. 25, 2017.

“Today’s ruling confirms that Canadian lumber mills are subsidized by their government and benefit from timber pricing policies and other subsidies which harm U.S. manufacturers and workers,” said Cameron Krauss, legal chairman for the U.S. Lumber Coalition.

The Department of Commerce is also still considering levying additional anti-dumping duties. The decision is scheduled for June 23.

On Oct. 12, 2015, the latest Softwood Lumber Agreement between the U.S. and Canada expired. On Nov. 25, 2016, following an imposed one-year cooling off period, the U.S. Lumber Coalition filed its petition with the Department of Commerce.

Lumber prices have increased over the past year in anticipation of duties being placed on Canadian softwood lumber imports into the U.S. The Random Lengths Framing Lumber Composite price is now $437 per thousand board feet, an increase of 26% over the past year.

It is expected that Canada will appeal to both a NAFTA dispute resolution panel and the World Trade Organization. Over the last 35 years, Canada has received favorable rulings from international tribunals, which for the most part have supported the country’s claim that it is neither subsidizing Canadian producers nor injuring U.S. manufacturers.

The rulings have played a part in encouraging the U.S. to reach a series of Softwood Lumber Agreements that typically soften earlier, unilateral decrees.

Jonathan Paine, president & CEO of the National Lumber and Building Material Dealers Association, said his group “continues its call for the U.S. and Canada to reach a new long-term softwood lumber agreement. Both sides should work cooperatively toward a resolution that ends the trade dispute and provides predictability and stability to the housing industry.”

NLBMDA supports a new SLA that helps meet domestic demand for softwood lumber, does not put American lumber producers at a competitive disadvantage, unnecessarily restrict the availability of products, or increase the cost of housing to the detriment of prospective home buyers and consumers.

Associated Press

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