The U.S. Commerce Dept. on Nov. 24 followed through with expected anti-dumping and countervailing duties on Canadian softwood lumber, placing tariffs of 17.99% on their imports—more than twice the 8.99% rate imposed during the Trump administration.
“These unjustified duties harm Canadian communities, businesses and workers,” said Mary Ng, Canada’s minister of international trade, in a statement. “They are also a tax on U.S. consumers, raising the costs of housing, renovations and rentals at a time when housing affordability is already a significant concern for many.”
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U.S.-Canada Dispute Impacts
In May, Commerce said it planned to hike the rate to 18.32%, but the agency decided to ratchet down that plan after further study over the summer. Nevertheless, the department more than doubled the base levy on Canadian producers. While homebuilder customers that Ng mentioned will likely be the hardest hit, contractors building commercial and other building types also expect to see increased prices due to the higher tariff rates.
“While lumber is much more important to single-family construction than multifamily, it is a significant cost element for many projects, such as remodeling projects and decks or other additions to restaurants,” Ken Simonson, chief economist for the Associated General Contractors of America, pointed out. “A doubling of this tariff will only prolong the extreme price increases that have hit lumber repeatedly over the past 18 months.”
However, U.S. lumber producers welcomed the stiffer penalties on what they have alleged for more than a decade was unfair competition due to government subsidies by Canada to its mills and producers.
“The U.S. Lumber Coalition strongly urges the administration to continue full trade law enforcement,” said Jason Brochu, its chairman, who also is co-president of Pleasant River Lumber Co., Dover-Foxcroft, Maine. “More U.S. lumber being produced in America to meet domestic demand is a direct result of the enforcement. A level playing field is critical for the continued investment and growth of the domestic lumber industry.”
The British Columbia Lumber Trade Council mentioned the fragile post-pandemic recovery of lumber markets, however, and said that U.S. producers would not be able to meet demand without the imports.
“Our strong hope is that the U.S. industry will end this decades-long litigation and instead work with us to meet demand for the low-carbon wood products the world wants, including American families,” said council President Susan Yurkovich.