Trade tensions rise between the world’s largest softwood lumber exporter and its biggest market, as U.S. Secretary of Commerce Wilbur Ross says he will “stand up for American companies and their workers.”
The U.S. will impose further punitive tariffs on imports of softwood lumber from Canada, escalating a longstanding trade dispute that’s already led to higher timber prices.
Preliminary anti-dumping duties of as much as 7.7 percent will be levied on Canadian producers, the U.S. Department of Commerce said Monday in a statement. The move follows the government’s decision in April to slap countervailing tariffs of up to 24.1 percent on shipments from Canadian companies including West Fraser Timber Co. and Canfor Corp.
Until Canada and the U.S. reach a negotiated solution on softwood lumber, the nation will continue to “vigorously apply” the anti-dumping and countervailing duties to “stand up for American companies and their workers,” U.S. Secretary of Commerce Wilbur Ross said in a statement.
The trade spat, which has been going on intermittently for decades, was reignited in November when the U.S. lumber industry filed a petition asking for duties. The group alleges Canadian wood is heavily subsidized and imports are harming U.S. mills and workers. Since then, trade between the two countries has become an increasingly fraught issue, with President Donald Trump seeking to renegotiate the North American Free Trade Agreement.
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The tariffs turned out to be less severe than some analysts had predicted. The U.S. Department of Commerce in a preliminary determination Monday said it has calculated that Canfor is selling product in the U.S. at 7.72 percent less than fair value, Resolute FP Canada at 4.59 percent, Tolko Industries at 7.53 percent and West Fraser at 6.76 percent. It set a preliminary dumping rate of 6.87 percent for all other producers in Canada.
Canada is the world’s largest softwood lumber exporter and the U.S. is its biggest market. Lumber futures in Chicago have jumped this year amid concerns that the trade battle will disrupt supplies.
While the additional duties are on the “lower end of the range” the industry was expecting, no tariffs are warranted, said Susan Yurkovich, the president of British Columbia’s BC Lumber Trade Council. Protectionist duties hurt Canadian companies and communities and also hurt U.S. consumers who choose to build, buy or renovate a new home, she said.
“We find it incredibly frustrating the U.S. industry continues to use litigation as a means to enhance their position and benefit from price volatility that their trade actions create,” Yurkovich said on a conference call with reporters.
The U.S. Commerce Department made a preliminary ruling earlier on Monday that the Atlantic provinces of Newfoundland and Labrador, Prince Edward Island and Nova Scotia will be excluded from the punitive tariffs. A final decision is expected by late summer.