U.S. vs Canada: Two sides respond to latest softwood lumber duties

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U.S. vs Canada: Two sides respond to latest softwood lumber duties

By Andy Carlo - 11/25/2020

The U.S. Lumber Coalition, an alliance of U.S. softwood lumber producers, said it is in agreement with the latest “Administrative Review” from the Department of Commerce regarding Canadian softwood lumber.

The department reported that Canadian softwood lumber is heavily subsidized and dumped into the U.S. market. 

Additionally, the review includes the issuing of a combined anti-subsidy and anti-dumping duty rate of 8.99% on Canadian softwood lumber imports. Prior rates were nearly 20% in some cases.

“While the U.S. Lumber Coalition has demonstrated that this calculation understates true levels of subsidies and dumping, these results nonetheless reinforce that the Canadian lumber industry benefits from significant government subsidies and dumps lumber into the U.S. market at unfairly low prices,” Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, said in a statement issued by the alliance.

North of the border, Canadian lumber industry representatives said the lower rate is welcomed but remains unwarranted. 

“While the reduction in duty rates from this first Administrative Review is a step in the right direction, the fact that we’re still paying duties on our lumber products sold to the U.S. market is both frustrating and disappointing,” said Susan Yurkovich, president of the British Columbia Lumber Trade Council (BCLTC).

“As we have consistently said, and as has been proven in previous rounds of litigation, the Canadian industry is not subsidized, and this trade action leveled by U.S. producers is completely without merit,” Yurkovich said.

The Commerce Department initiated the second administrative review in March 2020, covering Canadian lumber imports in 2019. A preliminary determination for the second administrative review is expected in late January 2021, according to the U.S. Lumber Coalition.

“Unfortunately, it appears that a World Trade Organization (WTO) dispute settlement panel report from an earlier and separate phase of the case, which is currently under appeal, had a negative impact on the countervailing duty rate for the first administrative review,” said van Heyningen.

“It is absolutely imperative that these flawed WTO recommendations are not allowed to undermine in any way the continued enforcement of the trade laws,” van Heyningen added. “the WTO case is far from over, and as such, it must not be allowed to influence the ongoing process and the results of the second administrative review.”

The U.S. Lumber Coalition reports that since 2016, the U.S. industry has added 7.6 billion board feet of new production to supply the U.S. market.  This means that more U.S. wood produced by U.S. workers for U.S. housing to support U.S. communities.

“The U.S. lumber industry will continue to push for the trade laws to be enforced to the fullest extent possible in the second administrative review to allow U.S. manufacturers and workers the chance to prosper,” said Jason Brochu, U.S. Lumber Coalition co-Chair and co-president of Pleasant River Lumber Company.

The BCLTC says the North American lumber market is served by both American and Canadian producers with U.S. demand from home builders and remodelers outpacing lumber produced in Canada. British Columbia is the largest Canadian exporter of softwood lumber to the United States.

“That’s why it is so unfortunate that the ongoing actions of the U.S. industry resulting in these unwarranted tariffs are placing an added cost burden on consumers,” the BCLTC said.

But Brochu says that continued, effective enforcement of U.S. trade laws “against unfairly traded Canadian lumber imports is absolutely critical for the continued growth of the U.S. industry and the 750,000 men and women who depend on it,” concluded Brochu.