Canadian Lumber Hit With New US Tariffs

The U.S. Department of Commerce has reduced softwood lumber duties for all Canadian producers except Resolute Forest Products. THE CANADIAN PRESS  Paul Chiasson

The U.S. insists Canada is unfairly subsidizing softwood lumber producers because in Canada, tracts of timber are owned by the provincial governments, while in the United States, softwood lumber lots are privately owned.

"The massive subsidies the Canadian government provides to their lumber industries have caused real harm to USA producers and workers". The group alleges Canadian wood is heavily subsidized and imports are harming US mills and workers. But its demands - which range from requiring that more auto production be made in the having more government contracts in the NAFTA bloc go to US companies - will likely be unacceptable to the U.S.' two other NAFTA partners, Canada and Mexico.

In a joint statement, Canadian Minister of Foreign Affairs Chrystia Freeland and Minister of Natural Resources Jim Carr called the decision "unfair, unwarranted and deeply troubling".

The U.S. Department of Commerce announced Thursday it will impose countervailing and antidumping import duties on several Canadian softwood lumber firms.

"We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field", U.S. Lumber Coalition co-chair Jason Brochu said in an emailed statement.

While significant efforts were made by the United States and Canada, and the respective softwood lumber industries, to reach a long-term settlement to this on-going trade dispute, the parties were unable to agree upon terms that were mutually acceptable.

"This administration must fully enforce America's trade laws, not just for the mills and workers in OR and across the country, but for the communities that depend on them", Wyden said.

The preliminary duties have forced Canadian companies to pay hundreds of millions of dollars in deposits, which could be refunded if they win a final ruling by the US International Trade Commission around December 18.

It also maintains that the country is providing unfair subsidies at rates from 3.34-18.19%.

The removal of punitive duties on Nova Scotia softwood lumber exports was announced Thursday by the U.S. Department of Commerce, after it ruled Nova Scotia's lumber sector was operating in an open market rather than receiving an unfair subsidy.

"We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action".

Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, denied that the American industry was the barrier to a deal. "This tariff only adds to the burden by harming housing affordability and artificially boosting the price of lumber".

Whereas Canadian companies sold US$4.9 billion worth of lumber into the 2104, in 2016 they sold US$5.6 billion. "It is nothing more than a thinly-disguised tax on American home buyers, home builders and consumers".

USA and Canadian officials have been working for months with industry representatives to come to an agreement to avoid the tariffs announced Thursday, which if permanently imposed will add a duty of around 20% or more, depending on the Canadian mill.

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