Trade Law and Duties
With its system of government subsidies and associated unfair trade practices, Canada is continuously displacing U.S. production and U.S. jobs through its sales of subsidized, below market-value softwood lumber to the United States. Canada’s unfair trade practices cause lost sales and revenues leading to mill closures and job cuts in communities across America.
Strong enforcement of the U.S. trade laws is critical for American lumber manufacturers and timberland owners. In their current system, Canadian producers receive advantages due to their unfair subsidies. Rules-based trade is essential to ensuring that all parties compete on a level playing field, and duties are a purposeful and WTO-consistent action that achieves this goal, giving U.S. lumber producers a fair opportunity. Full enforcement of U.S. trade laws allows the U.S. industry to invest and grow to its natural size without being impaired by unfairly traded imports. How trade law duties are determined and implemented.
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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.
Read the full article here.