U.S. to assess softwood lumber imports by nominal volume starting Oct. 22

SEATTLE (Scrap Monster): The U.S. will calculate softwood lumber import assessments using nominal volume and apply an equivalent rate of $0.62 per thousand board feet to lumber reported by net size. The rule will take effect Oct. 22, the U.S. Department of Agriculture’s Agricultural Marketing Service announced.

The standard assessment will remain $0.41 per thousand board feet for domestically manufactured and imported softwood lumber measured by nominal dimensions. Nominal size is based on a board’s dimensions when it is first cut, before drying and planing, while net size reflects its finished dimensions.

The distinction affects the volume used to calculate assessments. For example, a two-by-four board has a nominal cross-section of eight square inches but typically measures 1.5 inches by 3.5 inches after processing, producing a net cross-section of 5.25 square inches.

The U.S., Canada and Mexico generally record softwood lumber using nominal measurements. European countries commonly report lumber by net dimensions, creating different board-foot volumes for otherwise comparable shipments.

Under the conversion used for nominal measurements, 1,000 m3 equals about 424 thousand board feet. The net-volume conversion produces about 637 thousand board feet, or 50% more. The $0.62 net-size rate reflects this difference and is equivalent to the $0.41 assessment applied to nominal volume.

The Softwood Lumber Board identified the reporting discrepancy in 2021. An industry analysis released in 2023 provided separate conversion factors for nominal and net measurements. A subsequent U.S. Customs and Border Protection notice to importers and brokers did not correct the reporting problem, and Customs determined that the existing regulation was not explicit enough to enforce assessments based on nominal volume.

European suppliers will account for most of the affected imports. Customs data identified 388 importers of European softwood lumber between 2022 and 2024, including 27 whose average annual volumes exceeded the 15 million-board-foot exemption threshold.

Domestic manufacturers and importers will remain exempt from assessments on their first 15 million board feet during a fiscal year. The threshold will be calculated using nominal volume, including for companies that both manufacture lumber domestically and import it.

Importers expecting to remain below the threshold may apply annually for an exemption certificate. Companies that do not apply but finish the fiscal year below the threshold will be eligible for refunds. The board must generally issue refunds within 30 days after the fiscal year or within 60 days after receiving assessments collected by Customs, depending on the exemption category.

The revised calculation is expected to add more than $367 thousand to the Softwood Lumber Board’s budget. The rule will not add new reporting or recordkeeping requirements.

USDA will also add one board seat representing the U.S. South. Average softwood lumber production in the region reached almost 22.1 billion board feet during 2022-2024, compared with more than 13.6 billion board feet in the U.S. West and 1.6 billion board feet in the Northeast and Lake States.

The U.S. South will have six representatives, while the West will have four and the Northeast and Lake States will have one. Four members will represent importers, and one public member will remain on the board. The board will expand from 14 to 15 industry seats and will continue to have one public member, increasing total membership from 15 to 16.

Courtesy: www.lesprom.com