With no agreement to diffuse the long-running trade battle between the United States and Canada over softwood lumber, the U.S. Commerce Department said it will proceed with imposing antidumping and countervailing duties on these imports.
The U.S. Commerce Department will move forward with assessing antidumping and countervailing duties on imports of Canadian softwood lumber, the department said in a statement Thursday.
The U.S. and Canadian governments failed to reach a settlement to the long-running trade dispute that would have put an end to the U.S. antidumping and countervailing duty investigations.
“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” Commerce Secretary Wilbur Ross said in a statement. “This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”
Commerce determined that exporters from Canada have sold softwood lumber in the United States at 3.2 percent to 8.89 percent less than fair value. In addition, the department determined that Canada is providing subsidies to its softwood lumber producers at rates from 3.34 percent to 18.19 percent.
Specifically, Commerce found that Canfor Corp., Canadian Forest Products Ltd., and Canfor Wood Products Marketing Ltd. (Canfor); Resolute FP Canada Inc.; Tolko Marketing and Sales Ltd. and Tolko Industries Ltd. (Tolko); and West Fraser Mills Ltd. (West Fraser), were dumping at margins of 8.89, 3.2, 7.22 and 5.57 percent, respectively. For other Canadian producers and exporters of softwood lumber, the department established a final dumping margin of 6.58 percent.
The department calculated final subsidy rates for Canfor Corp., 13.24 percent; Resolute FP Canada Ltd., 14.7 percent; Tolko Marketing and Sales Ltd. and Tolko Industries Ltd., 14.85 percent; West Fraser Mills, Ltd., 18.19 percent; and J.D. Irving Ltd., 3.34 percent. For other Canadian softwood lumber producers and exporters, Commerce established a final subsidy rate of 14.25 percent.
Commerce said it will instruct Customs and Border Protection (CBP) to collect cash deposits from U.S. importers of Canadian softwood lumber based on the final rates.
The merchandise covered by Commerce investigation included softwood lumber, siding, flooring and certain other coniferous wood (softwood lumber products).
According to Commerce, U.S. imports of Canadian softwood lumber in 2016 were valued at $5.66 billion.
The petitioner for the Commerce antidumping and countervailing duty investigations into Canadian softwood lumber imports is the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations, whose members include the U.S. Lumber Coalition of Washington, D.C.; Collum’s Lumber Products in South Carolina; Hankins, Inc. of Mississippi; Potlatch Corp. and Weyerhaeuser, both of Washington; Rex Lumber Co. in Florida; Sullivan Forestry Consultants of Georgia; Sierra Pacific Industries in California; and Seneca Sawmill Co., Stimson Lumber Co., Swanson Group, Carpenters Industrial Council, Giustina Land and Timber Co. of Oregon.
The U.S. Lumber Coalition applauded Commerce’s action.
“We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field,” said Jason Brochu, the coalition’s co-chairman and co-president of Pleasant River Lumber Co. “The massive subsidies the Canadian government provides to their lumber industries have caused real harm to U.S. producers and their workers.”
“With a fair-trade environment, the U.S. industry, and the 350,000 hardworking men and women who support it, have the ability to grow production to meet much more of our country’s softwood lumber demand,” he added.
Meanwhile, Chrystia Freeland, Canada’s foreign affairs minister, and Jim Carr, the country’s natural resources minister, in a joint statement called Commerce’s antidumping and countervailing duties on Canadian softwood lumber “unfair, unwarranted and deeply troubling.”
“We will forcefully defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past,” the ministers said. “We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action.”
Canada estimates that forest products account for 7 percent of its exports and contribute $22.3 billion to the country’s gross domestic product (GDP).
To counteract anticipated U.S. antidumping and countervailing duties on softwood lumber, the Canadian government in early June announced $867 million in measures to support its forest industry workers and communities. This included up to $500 million in loans and loan guarantees to forestry companies from Export Development Canada (EDC) and $105 million in short and medium term commercial financing from the Business Development Bank of Canada. In addition, the Canadian government said it would put up more than $260 million to expand promotion of Canadian softwood lumber exports worldwide.
The U.S. International Trade Commission (ITC) is scheduled to make its final determinations regarding Canadian softwood lumber imports by Dec. 18. If the ITC affirms that these imports harm domestic industry, Commerce will issue final antidumping and countervailing duty orders for Canadian softwood lumber imports. If the ITC makes negative determinations of injury, the investigations will be terminated.
U.S. duty hammer falls on Canadian softwood lumber
