WASHINGTON – Canada’s Minister for International Trade has said she received no warning from her American counterpart until the United States proposed to double its tariffs on Canadian softwood lumber.

Mary Ng told a House of Commons committee hearing that U.S. Trade Representative Katherine Tai did not mention the possibility at Free Trade Commission meetings last month.

The US Department of Commerce’s preliminary lumber tariff increase to 18.32 percent, from 8.99 percent, came three days later.

Since this is a preliminary tariff rate, current cash deposit rates continue to apply until finalized rates are released, likely in November.

The increase came as lumber prices in North America hit new highs in May, fueled in large part by growing demand for renovations among homeowners trapped by the pandemic.

Those prices kept falling in June, in part because vaccinations and waning fears about COVID-19 helped ease demand.

At Friday’s International Trade Committee meeting, Conservative MP Tracy Gray asked Ng if Tai had mentioned the upcoming increase when the two met virtually at free trade meetings on May 18.

“No, she didn’t,” Ng replied.

When Gray asked her why she hadn’t picked up the phone later to discuss tariffs with Tai, Ng objected.

“I stand up for the Canadian softwood forestry sector and lumber workers and companies as a top priority,” she said. “This is a very important sector that employs many, many Canadians, and it is my commitment to always defend their interests.

Ng’s responses barely deviated from that theme throughout her hour-long appearance, except when she referred to recent public comments by Commerce Secretary Gina Raimondo.

Raimondo said at a Senate committee hearing last week that the price of lumber could be a push toward final resolution of a dispute that has plagued Canada-U.S. Relations for decades.

“The positive side could be that we take this opportunity to get everyone around the table, including the USTR, to find a long-term solution with Canada,” Raimondo said at the May 26 hearing. .

“It’s encouraging,” Ng said. “Our job here is to make sure that we stand up for the interests of our businesses and the industry against this overhaul and against the tariffs that have been applied.”

U.S. producers have long argued that Canada’s system of provincially regulating stumpage fees, which are paid to the Crown in exchange for the right to harvest timber, amounts to an unfair subsidy.

Therefore, argues the United States, imports of Canadian lumber should be subject to countervailing duties.

The Trump administration attempted to impose a 20% tariff on softwood lumber in 2017, but that effort was scuttled after the World Trade Organization sided with Canada last year .

Arun Alexander, director general of the federal department’s North American trade policy office, said softwood lumber tariffs on Canadian imports have only served to make homes and renovations more expensive for consumers. United States.

“The average cost of a middle-class home in the United States, the price has increased from $ 35,000 to $ 40,000 due to tariffs,” Alexander said, citing data from the National Association of Homebuilders, based in the United States. United States.

In the case of mixed-use housing, which is the affordable housing stock in the United States, the increase was about $ 19,000, he added.

The association, said Alexander, “argues very vehemently … that tariffs on Canadian softwood lumber have a significant impact on the price of housing in the United States, especially in light of the recovery and for affordable housing ”.

This report by The Canadian Press was first published on June 4, 2021.

James McCarten, The Canadian Press



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