U.S. cuts softwood tariffs by half for Canadian lumber as trade dispute lingers

U.S. cuts softwood tariffs by half for Canadian lumber as trade dispute lingers

Softwood lumber is pictured along the Fraser River in Richmond, B.C., Tuesday, April 25, 2017.JONATHAN HAYWARD/The Canadian Press

The U.S. Department of Commerce is lowering tariffs against most Canadian softwood producers by half, but the long-running trade dispute lingers as Canada plans to appeal the decision to maintain punitive duty rates.

After an administrative review, the Commerce Department said on Thursday that it will decrease the duty rate for most Canadian lumber producers to 8.59 per cent, compared with the current 17.91 per cent.

The Commerce Department had made its intentions known in January to reduce tariffs, proposing a preliminary duty rate of 11.64 per cent, and has now reduced that amount further with a final rate of 8.59 per cent.

International Trade Minister Mary Ng said U.S. duties on Canadian lumber are unwarranted and unfair.

“These duties have caused unjustified harm to the Canadian industry and its workers. They also amount to a tax on U.S. consumers, exacerbating housing unaffordability at a time of increased supply challenges and inflationary pressures,” she said in a statement.

Ms. Ng said Canada plans to oppose the latest tariff rates, including by filing a challenge through a dispute-settlement process under Chapter 10 of the Canada-U.S.-Mexico Agreement.

The new rates are expected to take effect on Aug. 10 or soon after.

Under the new tariff schedule, Vancouver-based Canfor Corp. will see its duty rate drop to 5.87 per cent, down from the current 19.54 per cent.

Vancouver-based West Fraser Timber Co. Ltd. will pay a rate of 8.25 per cent, compared with 11.14 per cent, while Montreal-based Resolute Forest Products Ltd.’s new tariff will be 14.86 per cent, down from the current 29.66 per cent.

Saint John-based J.D. Irving Ltd.’s rate will be 7.17 per cent, compared with 15.05 per cent today.

The 2006 Canada-U.S. softwood agreement expired in October, 2015, with no replacement. In the latest round of the trade dispute, Canadian producers have been paying U.S. lumber duties since April, 2017.

“While the reduction in duty rates from this third administrative review is welcome, the fact that we are required to continue to pay duties on our lumber products sold to the U.S. market remains frustrating and disappointing,” BC Lumber Trade Council president Susan Yurkovich said in a news release. “As U.S. producers remain unable to meet domestic demand, these duties continue to hinder post-pandemic recovery and exacerbate inflationary pressures on both sides of the border.”

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