Construction Materials
Canada to Challenge Latest US Tariff on Softwood Lumber
Photo by Marc Clery/Delaware State New via AP
In the latest chapter in a trade dispute that has stretched on for years, Canada has announced that it plans to challenge recently announced U.S. tariffs on its shipments of softwood lumber to the U.S. before the U.S. Court of International Trade.
In announcing the action on Sept. 1, Mary Ng, Canada’s minister of export promotion, international trade and economic development, said in a statement, “For years, the United States has imposed unfair, unjust and illegal duties on Canadian softwood lumber, hurting Canadian industry and creating rising housing costs in both our countries."
Softwood lumber is an important material in homebuilding, particularly in the single-family category.
Ng said U.S. duties now in effect are at a combined duty rate of 7.99%, a rate set in July by the U.S. Commerce Dept. as part of its latest annual review of anti-dumping and countervailing duty cases.
But Ng also said, “Canada continues to remain ready and willing to discuss a negotiated outcome to the dispute that provides the stability and predictability the sector needs to ensure its continued growth and success.”
According to an Aug. 31 Canadian Press story that appeared in the Globe and Mail, U.S. Ambassador to Canada David Cohen said in a statement, "The United States is open to resolving our differences with Canada over softwood lumber to ensure a level playing field."
He added, "U.S. trade officials have communicated to Canada our commitment to reaching an agreement if Canada addresses underlying policy issues related to subsidization and fair competition."
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The U.S. lumber industry has long criticized Canada’s policies toward its lumber producers, contending that it has subsidized its lumber and dumped the product in the U.S. at prices that harm U.S. producers.
U.S., Canada Industry Groups Weigh In
In a statement issued July 27–the same day the U.S. Commerce Dept. announced its 7.99% duty rate–U.S. Lumber Coalition Chairman Andrew Miller said the trade cases that led to setting that rate “help offset Canadian lumber subsidies and dumping, allowing U.S. lumber manufacturers to compete in a fair market, invest in their businesses and supply more U.S. lumber milled by U.S. workers to build U.S. homes.”
But Linda Coady, president of the Vancouver, British Columbia-based BC Lumber Trade Council said on July 27 that the 7.99% duties “are unwarranted and unfair because BC and Canadian producers are not subsidized.”
The group says it is frustrated that, more than six years into the latest phase of the trade dispute, appeals under dispute-resolution provisions in the North American Free Trade Agreement and the Canada-U.S.-Mexico Agreement have not taken place.
Liz Thompson, a spokesperson for the National Association of Home Builders, said of Canada's action that "since this is in litigation, we are not able to comment at this time."
The U.S. Trade Representative's office did not respond to ENR's request for comments.
The dispute goes back decades and has had its ups and downs. A key development was the bilateral 2006 Softwood Lumber Agreement, which ended a 2001-2006 phase of the trade fight.
That pact plus extensions carried through October 2015 and was followed by a one-year moratorium on U.S. trade investigations of Canadian lumber pricing.
Since 2017, the dispute has resurfaced. According to a Canadian government agency backgrounder, the U.S. has again imposed duties on the country's lumber, moves it has challenged under dispute-resolution provisions of NAFTA, the Canada-U.S.-Mexico Agreement and the World Trade Organization.
Story updates on 9/6/2023 with a statement from the National Association of Home Builders
