U.S. reduces duty rates on Canadian softwood but levies still hefty
But the U.S. Lumber Coalition said the latest duty rates are justified.
SEATTLE (Scrap Monster): The U.S. Department of Commerce plans to reduce duty rates for most Canadian softwood producers, but they would still need to pay hefty levies of 34.83 per cent on shipments south of the border.
U.S. import taxes on softwood lumber currently total 45.16 per cent on most Canadian producers, including combined countervailing and anti-dumping duties of 35.16 per cent and tariffs of 10 per cent.
In its announcement on Thursday for preliminary revisions, the Commerce Department said it expects to decrease the anti-dumping duty rates to 10.66 per cent from 20.53 per cent.
Most Canadian producers also face paying 14.17 per cent for countervailing duties, down slightly from 14.63 per cent, based on the preliminary determination.
The U.S. slaps countervailing duties on what it sees as government-subsidized Canadian lumber and charges anti-dumping duties because it claims Canadian producers sell softwood below market value.
“Americans are already facing elevated housing costs and a shortage of homes,” Kurt Niquidet, president of the BC Lumber Trade Council, said in a statement. “These duties continue to make it more expensive to build homes at a time when both countries should be working together to improve housing affordability.”
But the U.S. Lumber Coalition said the latest duty rates are justified.
“The Commerce Department findings confirm, yet again, that Canada continues to trade unfairly in softwood lumber,” Zoltan van Heyningen, the coalition’s executive director, said in a news release. “Time has come for Canada to stop subsidizing its lumber industry and instead reduce its massive excess lumber production to meet market realities.”
The Commerce Department’s administrative review is based on lumber markets in 2024. New duty rates are intended to take effect by late summer of 2026, subject to further revisions in a final determination.
U.S. President Donald Trump announced new 10-per-cent tariffs on softwood in September against Canada and other countries, citing Section 232 of the U.S. Trade Expansion Act, which allows him to invoke national-security concerns to impose such levies. The new tariffs took effect on Oct. 14 and are on top of the duties.
Canadian forests are mostly on public land, where buyers pay “stumpage fees” to provincial governments for the right to log. The U.S. argues those fees can give companies in Canada an unfair competitive advantage over their American counterparts, which harvest timber largely from private lands and bid against each other for the privilege.
Last August, Prime Minister Mark Carney unveiled plans to support Canada’s softwood industry. Ottawa’s $1.2-billion financial package included $700-million in loan guarantees and $500-million in grants and contributions in a bid to diversify markets and reduce dependence on the U.S.
The federal government subsequently announced an extra $500-million in loan guarantees to help Canadian producers of softwood lumber with their operations.
Courtesy: www.theglobeandmail.com