Representatives from various Canadian governments and the lumber industry express disappointment that the United States has decided to move forward with a plan to double the amount of tariffs it imposes on lumber softwood lumber from Canada.
On Wednesday, the US Department of Commerce said it would impose an average duty of 17.9% on softwood lumber imported from Canada. This is more than double the previous rate of 8.99%.
In May, the U.S. government announced plans to raise the rate to 18.32 percent, but after further analysis over the summer, the agency decided to scale back that plan, while doubling all of even the levy.
The United States asserts that Canadian lumber producers are dumping their product into the United States at a lower price than the US lumber companies can afford because they are subsidized. Thus, the United States imposes a tariff on all softwood lumber in Canada to increase its retail price, which encourages consumers to purchase American lumber.
Canada has long rejected these claims, and various trade tribunals on the issue have ruled in favor of Canada.
“At every step of the way, the decisions concluded that Canada was a fair trading partner,” International Trade Minister Mary Ng said in a press release, in which she expressed how “disappointed” Ottawa was with decision.
“The United States has long relied on Canadian lumber products to meet its domestic needs for high-quality building materials,” said Ng.
“These unjustified rights hurt Canadian communities, businesses and workers. They are also a tax on American consumers, raising the costs of housing, renovating and renting at a time when housing affordability is already a major concern for many.
Not all lumber will have the same duty
Canada exports approximately $ 8 billion in lumber to the world each year, according to official government data. The United States is the biggest buyer.
Ng says Canada will continue to defend the industry against unfair tariffs, including through litigation under the North American trade agreement CUSMA, its predecessor NAFTA and the World Trade Organization. As recently as the summer of 2020, the WTO ruled in favor of Canada on the issue.
Not all Canadian lumber will be subject to the same tariffs because the United States claims that different companies are subsidized at different levels. The final prices are as follows:
- Canfor Corp., 19.54 percent.
- West Fraser Timber Co., 11.12 percent.
- Resolute Forest Products Inc., 29.66 percent.
- JD Irving, 15 percent.
All of these rates are slightly lower than those offered in May, but well above where they were previously.
The British Columbia Lumber Trade Council says tariffs make no sense because the United States does not produce enough softwood to meet its own demand.
Official data shows that the United States produces only enough softwood lumber to meet about 70 percent of its own needs. Most of the rest is from Canada.
“Our firm hope is that the American industry will end this decades-long litigation and work with us to meet the demand for the low-carbon wood products that the world wants, including American families,” said Chairman of the Board, Susan Yurkovich.
“Until then, we will continue to vigorously defend our industry against these baseless allegations.”
Alberta Agriculture, Forestry and Rural Economic Development Minister Nate Horner has said the higher tariffs are totally unacceptable.
“Any amount of tariffs unfairly targets our lumber exports and these decreasing and then increasing rates create uncertainty on both sides of the border,” he said in a statement.
New Brunswick Premier Blaine Hicks also expressed disappointment with the decision. “We are very disappointed with the decision of the US government to increase these unfair and unjustified duties against lumber exports from New Brunswick,” he said.
US softwood lumber lobby welcomes news
The US Lumber Coalition, the lobby group that represents the industry in the country, welcomed the tariffs, saying in a press release that it “remains open to a new softwood lumber trade deal if and when the Canada can show that it is serious about negotiating an agreement that offsets the damage caused by Canadian unfair trade to producers, workers and holders of forest land in the United States.
“Until then, the US Lumber Coalition fully supports the rigorous and continued application of US trade laws to combat unfair Canadian trade practices in softwood lumber.
The group says that while it is true that the United States has historically not produced enough softwood lumber to meet its own demand, this is no longer the case as American producers have increased their capacity. in recent years and now produce approximately 3.5 million board feet of softwood lumber each year.
“These increases have more than offset any decline in unfairly traded Canadian imports and are sufficient to build approximately 1.2 million US single-family homes,” the group said.