The US Commerce Department is cutting tariffs against most Canadian softwood lumber producers by half, but the long-running trade dispute rages on as Canada plans to appeal a decision to maintain punitive tariff rates.
After an administrative review, the US Commerce Department said Thursday that it will reduce the tariff rate for most Canadian lumber producers to 8.59%, compared to the current 17.91%.
The Commerce Department had made its intentions to cut tariffs known in January, proposing a preliminary tariff rate of 11.64 percent, and has now lowered that amount further with a final rate of 8.59 percent.
International Trade Minister Mary Ng said US tariffs on Canadian timber are unjustified and unfair.
“These duties have caused unwarranted harm to Canadian industry and its workers. They also amount to a tax on American consumers, exacerbating housing unaffordability at a time of heightened supply challenges and inflationary pressures,” he said in a statement.
Ms. Ng said that Canada plans to oppose the latest tariff rates, including by challenging it through a dispute resolution process under Chapter 10 of the Canada-US-Mexico Agreement.
The new rates are expected to go into effect on or shortly after August 10.
Under the new tariff schedule, Vancouver-based Canfor Corp. will see its tariff rate drop to 5.87 percent, down from the current 19.54 percent.
Vancouver-based West Fraser Timber Co. Ltd. will pay a rate of 8.25 percent, compared with 11.14 percent, while Montreal-based Resolute Forest Products Ltd.’s new rate it will be 14.86 percent, down from the current 29.66 percent.
The rate for Saint John-based JD Irving Ltd. will be 7.17 percent, compared with 15.05 percent today.
U.S. Lumber Coalition supports Department of Commerce decision
The total duty rate of 8.59% confirms yet again that Canadian lumber imports are unfairly traded into the U.S. market, said U.S. Lumber Coalition in a statement.
“The trade laws duties announced today by the Commerce Department will help offset Canada’s unfair trade practices,” said Andrew Miller, Chairman of the U.S. Lumber Coalition and CEO of Stimson Lumber. “The benefit of the trade cases against Canada are clear,” added Miller, “trade law enforcement boosts American manufacturing and results in more U.S. lumber being produced by U.S. workers to build U.S. homes.”
U.S. sawmills have invested heavily to expand capacity since the trade cases were filed in 2016. The domestic industry has produced an additional 15 billion board feet of lumber through 2021, averaging 3 billion a year of additional output. This is enough lumber to build over 1 million single-family homes, the U.S. Lumber Coalition said.
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