US locks in duties on Canada’s softwood lumber industry

A U.S. trade panel on Thursday unanimously ruled to uphold hefty duties on Canada’s softwood lumber industry saying the U.S. industry has been harmed by unfair practices.

The U.S. International Trade Commission’s (ITC) made a final determination, in a 4-0 vote, that Canada subsidizes and dumps lumber exports into the United States, a move that is likely to increase already tense negotiations to update the North American Free Trade Agreement (NAFTA).

{mosads}The U.S. Lumber Coalition, which filed a petition last year with the Commerce Department to open a case against Canada’s softwood lumber industry, praised the decision.

“The evidence presented to the ITC was clear — the massive subsidies that the Canadian government provides to its lumber industry and the dumping of lumber products into the U.S. market by Canadian companies cause real harm to U.S. producers and workers,” said Jason Brochu, U.S. Lumber’s co-chairman in a statement.

“Now, with a level playing field, the U.S. lumber industry, and the 350,000 hardworking men and women who support it, can have the chance to compete fairly,” Brochu said. 

Senate Finance Committee ranking member Ron Wyden (D-Ore.) supported the ITC’s decision.

“Imports of underpriced, subsidized Canadian softwood lumber have hurt American mills, millworkers and rural communities in Oregon and across the country,” Wyden said.

“With today’s unanimous decision from the International Trade Commission, help is finally on the way,” he said. 

The Trump administration has repeatedly vowed to punish countries they say violate trade rules to the detriment of the United States.

In November, the Commerce Department issued a final determination to slap hefty tariffs on exports from Canada.

The tariff will average 20.83 percent on Canadian lumber imports, which are used mostly for home building in the United States. 

The Canadian government has denied taking actions to prop up the industry to the detriment of the U.S. industry. Last week, Canada filed a case at the World Trade Organization in response to the Commerce decision to levy the tariffs.

Susan Yurkovich, president of the BC Lumber Trade Council in Vancouver, said while the ruling was not unexpected, it “is completely without merit.”

“The ITC finding of ‘injury’ despite the current record-setting profitability of the U.S. lumber industry, makes it very clear that this was not an objective evaluation of the facts,” Yurkovich said.

“The fact is, there is no injury to U.S. producers, and we are fully prepared to fight this egregious decision,” she said.

Canada will start appeals soon with the goal of getting the ITC decision overturned, she said. 

U.S. home builders, who are in disagreement with the lumber industry over the softwood issue, said they were disappointed by the ruling and “believe this is a protectionist measure designed to safeguard the interests of major domestic lumber producers at the expense of American consumers.” 

“These tariffs are acting as a tax on American home buyers and lumber consumers,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB).

NAHB estimates that the tariffs will increase the price of an average single-family home built in 2018 by $1,360. 

Canada and the U.S. are still trying to work out a new softwood trade agreement but have so far failed to reach a deal. 

Any lumber agreement is expected to remain outside of a final NAFTA pact. 

In 2016, imports of softwood lumber from Canada were valued at an estimated $5.66 billion.

More than 95 percent of all imported lumber came from Canada last year.