U.S. softwood lumber producers have won a round in their trade battle against Canada, as the U.S. International Trade Commission determined there is a “reasonable indication” that shipments from Canada have harmed the domestic industry.
The USITC’s Jan. 6 decision allows the Commerce Dept. to continue its proceeding to determine levels of antidumping and countervailing duties to impose on Canadian lumber imports. The panel’s vote was 5-0, with one other commissioner not participating in the investigation.
The USITC said in a statement that its preliminary investigations had found a “reasonable indication” that the U.S. lumber industry “is materially injured by reason of imports of softwood lumber products from Canada that are allegedly subsidized and sold in the United States at less than fair value.”
The panel also said that Commerce’s countervailing duty finding is due by Feb. 20 and its preliminary antidumping duty decision by May 4.
A spokesman for the U.S. Lumber Coalition, an industry group, said via email on Jan. 6, “Based on the facts of the case and the clearly damaging impact Canadian imports have had on our industry, [there was] no surprise regarding today’s ruling.”
But the National Association of Home Builders is concerned about the impact of the USITC decision. An NAHB spokesman said in a Jan. 7 emailed statement, “While expected, this ruling is a disappointment and will further harm U.S. consumers and home builders by increasing housing costs.”
The spokesperson added, “We are projecting that restrictions on Canadian lumber imports will result in an estimated 2 billion board feet shortage of lumber, coupled with significant increases in lumber prices.”
The Committee Overseeing Action for Lumber International Trade Investigations or Negotiations, a U.S. industry group, on Nov. 25 filed a trade complaint against Canadian lumber with the USITC and Commerce after lengthy U.S.-Canada negotiations on a new softwood lumber agreement failed to achieve a deal.
A previous bilateral lumber pact expired in October 2015, followed by a one-year “standstill” period during which negotiations took place and both sides agreed not to file trade actions.
Steve Thomson, British Columbia’s Forests, Lands and Natural Resource Operations Minister, in a Jan. 6 statement, made a point similar to NAHB’s. He said, “With [a] forecast for continued increase in U.S. housing starts, the U.S. needs our lumber and penalties only hurt housing affordability for middle-class Americans by raising building costs.”
Thomson added, “It is in the best interest of both sides to quickly come to terms on a deal and get back to focusing on growing our respective economies rather than wasting time, energy and resources in costly litigation.
He also said, “That said, British Columbia is prepared to fight, alongside Canada, on behalf of British Columbians and the 140 communities that rely on the forest sector. We are confident we will win yet again.”
Story corrected on Jan. 16, 2017. Original version misspelled surname of British Columbia Forests, Lands and Natural Resource Operations Minister Steve Thomson.