Canadian Subsidies and Dumping
Canada’s unfair trade in lumber is threatening rural America’s Main Street economy. This is an issue of jobs, fairness in trade and economic stability for thousands of communities and hundreds of thousands of hardworking families across the U.S.
Canadian lumber mills receive government subsidies, among them below-market harvesting fees from publicly owned land. Canadian softwood lumber producers unfairly outcompete American producers and dump their unfairly traded softwood lumber in the U.S. market, putting U.S. lumber mills – which, unlike Canadian Mills, operate under a free market – at a fundamental competitive disadvantage. Because of unfair trade, U.S. mills lose sales, causing difficulty in maintaining production and employment levels. This harms communities all across the country and damages the overall U.S. economy.
What the United States needs is continued enforcement of the U.S. trade laws to offset Canadian lumber subsidies and unfair trade. The enforcement of U.S. trade laws will maximize long-term domestic production and lumber availability produced by U.S. workers to build U.S. homes.
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The meet-and-greet Tuesday between Canadian Prime Minister Mark Carney and President Donald Trump undoubtedly included a discussion of tariffs between the two countries.
Earlier in the day, Trump had ruminated on Truth Social about why, from his perspective, America was subsidizing Canada. “We don’t need their Cars, we don’t need their Energy, we don’t need their Lumber, we don’t need ANYTHING they have,” Trump wrote.
When it comes to wood imports, that is certainly the position of the U.S. Lumber Coalition, which has maintained that the U.S. timber industry can supply virtually all of the U.S. housing industry’s lumber needs, but it is being crippled by cheap imports from Canada.
The coalition, an alliance of softwood lumber producers, argues that Canada has long been dumping softwood lumber on the U.S. market and selling it below the cost of production, or below their home sales market price.
In response, the U.S. Department of Commerce has investigated the complaints, and the U.S. International Trade Commission has heard the cases. Only after much deliberation are duties placed on the lumber imports. For instance, after more than a year of investigations into industry complaints about Canadian subsidies given to their lumber industry, the U.S. increased the existing duty to 14.56%.
Those duties could increase to 34.5% later this year, after more dumping charges were leveled at Canadian producers. The final determination is set for August or September.
Earlier this year, tariffs were set to be added to the duties to be added on top of the 34.5% duties, greatly increasing the cost of Canadian lumber. But lobbying by some groups, including the National Association of Home Builders (NAHB), helped Canadian softwood avoid being placed on the list of imports facing tariffs from the Trump administration.
NAHB has argued that Canadian softwood imports account for about 30% of the wood used in building homes in the U.S. Without the Canadian imports, the housing construction industry would be hit by shortages and higher construction costs at a time when housing construction costs are near record highs.
Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, maintained in an interview with Scotsman Guide that the Canadian lumber industry has increased its excess lumber capacity by threefold since 2016 and now has 8.7 billion board feet of excess production capacity. Much of that wood is coming into the U.S. market and undercutting American lumber producers, he claimed.
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