In the latest flare-up in a long-festering trade dispute, the Commerce Dept. is levying antidumping tariffs on Canadian softwood lumber shipments to the U.S., contending that the products are being sold below fair value.
The move, which Commerce announced on June 26, was welcomed by U.S. lumber producers but drew criticism from Canadian government and industry officials—as well as from U.S. home builders, who predict that it will prompt a rise in lumber and housing prices.
Commerce said the antidumping fees would range from 4.59% to 7.72%, depending on the Canadian producer. When those fees are added to countervailing duties that the U.S. imposed in April, total tariffs on Canadian lumber will range from 17.41% to 30.88%.
Top Canadian officials vow to fight the U.S. action. Minister of Natural Resources Jim Carr and Minister of Foreign Affairs Chrystia Freeland said in a joint statement, “We will vigorously defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past.”
The U.S. Lumber Coalition, a group of lumber producers, praised Commerce’s action. Coalition spokesman Zoltan van Heyningen said in a statement: “For years, Canada has unfairly distorted the softwood lumber market with billions of dollars in support of their producers. This has allowed Canadian producers to dump their product on the U.S. market to the detriment of U.S. manufacturers, as now confirmed by the Dept. of Commerce.”
Susan Yurkovich, president of the Vancouver-based BC Lumber Trade Council, told reporters in a June 26 conference call, “The duties are a direct result of the actions taken by the protectionist U.S. lumber lobby, whose sole purpose is to create artificial constraints on Canadian lumber to drive up prices for their benefit at the expense of American consumers.”
Yurkovich says talks aimed at reaching a deal to settlement in the long-running dispute are ongoing. Carr and Freeland said they will continue to try to “maintain a dialogue” with U.S. officials to reach a lumber trade agreement.
Commerce Secretary Wilbur Ross said, “While I remain optimistic that we will be able to reach a negotiated solution on softwood lumber, until we do, we will continue to vigorously apply the [antidumping] and [countervailing duties] laws to stand up for American companies and their workers.”
Commerce did exclude from tariffs the lumber shipped from three Canadian Maritime provinces—Newfoundland and Labrador, Nova Scotia and Prince Edward Island.
But Yurkovich said exports from those Maritime provinces “are a very, very small portion of the lumber production in our country,” and estimated their share as 1.5% to 2%.
Commerce is expected to issue its final determination on antidumping duties by about Sept. 7.
In the meantime the U.S. Customs and Border Protection agency will collect cash deposits from the Canadian exporters based on the preliminary rate levels. The agency has been collecting deposits based on the countervailing duties since they were announced.
The National Association of Home Builders says the tariffs will boost the cost of housing in the U.S. and cost more than 11,000 jobs.
NAHB Chairman Granger MacDonald said in a statement that the two sets of duties are “basically another tax on American home builders and home buyers that will jeopardize affordable housing in America.”
Paul Emrath, NAHB senior economist, estimates that the new tariffs would increase lumber prices for consumers by 8.8% and boost the cost of a single-family home by $1,700. NAHB also says the tariffs would cause the loss of 11,336 full-time jobs in the U.S.
Story updated on 6/29 to correct spelling of Granger MacDonald's surname