Commerce lowers Canadian softwood lumber duties; reactions mixed
November 30, 2020 | 11:46 am CST
WASHINGTON - The U.S. Department of Commerce has set a new average duty rate of 8.9 percent on Canadian softwood lumber imports. The new rate is down from the original 20.2 percent average applied back in 2018.
The U.S. Lumber Coalition, an alliance of large and small American softwood lumber producers, said the new rate understates the issue.
"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," stated Zoltan van Heyningen, Executive Director of the U.S. Lumber Coalition.
Last August, the World Trade Organization (WTO) ruled that U.S.-imposed duties on Canadian softwood lumber broke global trading rules, arguing that Washington could not back up its claims. The U.S. appealed that ruling.
The U.S. Lumber Coalition believes the WTO ruling affected the recent Commerce ruling.
"Unfortunately, it appears that a 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," emphasized van Heyningen, "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 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.
Many Canadian leaders said the ruling is a step in the right direction, but still isn't enough.
“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," Susan Yurkovich, CEO of the Council of Forest Industries (COFI), said in a press release.
British Columbia Premier John Horgan echoed Yurkovich's statement.
“While this reduction in duties will bring much needed relief to our industry, any duties applied to our softwood lumber exports to the U.S. are unjustified," he said.
Softwood lumber import tariffs of around 21 percent were levied onto Canada in 2018. Those tariffs worked to restructure the entire lumber global supply chain - incentivizing U.S. buyers to import from overseas rather than ship lumber across the Canadian border.
Canada's imports to the U.S. have certainly slipped, as we've covered before. British Columbia - Canada's largest lumber-producing province - exported just over 514 million board feet of lumber to the U.S. in October 2018, down from 645 million board feet from the same time 2017.
A second review from Commerce is expected to begin in January 2021.
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