March 20, 2018

United States slaps import duties on Canadian softwood lumber

04 November 2017, 12:22 | Darrell Baldwin

Premier Stephen Mc Neil said he would have liked to have seen New Brunswick included in the exemption

Premier Stephen McNeil

The U.S. argues that in their view the duty is required to offset unfair subsidies that Canadian and provincial governments allegedly provide to lumber companies.

The antidumping duty and countervailing duty laws provide USA businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of dumping unfairly priced and unfairly subsidized imports into the United States.

The Commerce Department said Thursday it had finalized determinations that Canadian exporters of softwood lumber had sold their product in the United States at between 3.2 percent and 8.9 percent below fair value.

The weighted average tariffs levied by the Trump administration consist of 14.25 per cent for countervailing duties and 6.58 per cent for anti-dumping levies.

The US Commerce Department valued softwood lumber imports from Canada at C$7.6bn (US$5.6bn;£4.3bn) in 2016. But its demands - which range from requiring that more auto production be made in the having more government contracts in the NAFTA bloc go to USA companies - will likely be unacceptable to the U.S.' two other NAFTA partners, Canada and Mexico.

The U.S. International Trade Commission has 45 days to issue its final determination on whether the American lumber industry suffered harm.

But the B.C. government is also aggressively trying to push B.c. lumber into Asian markets.

A preliminary ruling on countervailing duties by the U.S. Commerce Department this past spring temporarily imposed duties of 19.88 per cent on Nova Scotia producers.

The aid came after the United States first slapped hefty tariffs on the import of Canadian softwood lumber in April. From January 20, 2017, through November 1, 2017, Commerce has initiated 77 antidumping and countervailing duty investigations - a 61 percent increase from 48 in the previous year.

"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", Ross said.

Talks continue between Canada and the get a softwood lumber agreement that would remove the duties.

The duties have driven up the price of lumber to cover the extra costs, adding to the cost of building a home in the United States. "It is nothing more than a thinly-disguised tax on American home buyers, home builders and consumers". An earlier version said Resolute was the only producer to have its duties raised. Canada also is providing unfair subsidies to its producers at rates from 3.34 percent to 18.19 percent. The official statement says that despite significant exports made by both Canada and the United States, and the respective lumber industries to reach a long-term settlement, the parties could not reach a mutually acceptable solution.

"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". Canadian unions and lumber companies fear the issue will eventually cause layoffs once prices and demand fall. However, it has now said that despite efforts by the United States and Canada, and their respective softwood lumber industries, the parties were unable to reach a mutually acceptable settlement.

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