USA slaps import duties on Canadian softwood lumber

The U.S. Department of Commerce has reduced softwood lumber duties for all Canadian producers except Resolute Forest Products. THE CANADIAN PRESS  Paul Chiasson

US slaps import duties on Canadian softwood lumber

"While I am disappointed that a negotiated agreement could not be reached between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada", US. Foreign companies that receive financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods, are subject to CVD duties.

"With today's action by the Commerce Department, American lumber mills and millworkers are one step closer to getting hard-won relief against subsidized and dumped Canadian softwood lumber", Wyden said.

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 antidumping duty and countervailing duty laws provide US 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 2006 softwood lumber agreement between Canada and the United States expired in October, 2015.

"As we have consistently said, these duties are unwarranted and this trade action is completely without merit", said Susan Yurkovich, president of the B.C. Lumber Trade Council.

The softwood lumber duties are a double-whammy for the USA housing sector, which is expected to have mortgage interest deductibility on new home purchases capped at US$500,000 during the federal tax overhaul.

"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.

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

Commerce issued preliminary determinations in its countervailing duty and anti-dumping duty investigations in April and June, respectively. The group alleges Canadian wood is heavily subsidized and imports are harming USA mills and workers.

Canada is the world's largest softwood lumber exporter and the U.S.is its biggest market. "These duties are a tax on the American middle-class families, too, whose homes, renovations and repairs will only be more expensive".

While the duties are lower for most producers than first indicated by USA officials, Prime Minister Justin Trudeau says they are still unacceptable. Canada also is providing unfair subsidies to its producers at rates from 3.34 percent to 18.19 percent.

"We will forcefully defend Canada's softwood lumber industry, including through litigation, and we expect to prevail as we have in the past".

The dispute helped to spark a surge in lumber prices in the US, with the increased uncertainty over supplies coming at the same time as a recovery in the American housing market. Canadian unions and lumber companies fear the issue will eventually cause layoffs once prices and demand fall.

The U.S. confirmed punitive tariffs on imports of softwood lumber from Canada as the two nations remain at an impasse over a trade agreement, although the penalties will be lower than previously indicated.

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