U.S. slaps tariffs on Canadian softwood lumber

The Commerce Department announced a plan to collect 3% to 24%  -- averaging at about 20% -- of what it called “countervailing duties” on lumber entering the country from Canada.

The move is the latest blow in a trade dispute that has simmered since the U.S. and Canada’s Softwood Lumber Agreement expired in October of 2015.

The Commerce Department spelled out specific duties for 5 companies, Canfor Corporation, 20.26%; for J.D. Irving, Limited, 3.02%; for Resolute FP Canada, Ltd., 12.82%; for Tolko Marketing and Sales Ltd. and Tolko Industries Ltd., 19.50 %; and, for West Fraser Mills, Ltd., 24.12%. Commerce established a preliminary subsidy rate of 19.88 % for all other producers/exporters in Canada.

Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates. (See announcement here.)

“It has been a bad week for U.S.-Canada trade relations,” said Wilbur Ross, U.S. Commerce Secretary.

On the other side of the border, Canada’s Natural Resources Minister Jim Carr said: "This decision will negatively affect workers on both sides of the border, and will ultimately increase costs for American families who want to build or renovate homes."

The tariffs are in response to a petition from U.S. companies including Collum’s Lumber Products, L.L.C. (SC); Hankins, Inc. (MS); Potlatch Corporation (WA); Rex Lumber Company (FL); Seneca Sawmill Company (OR); Sierra Pacific Industries (CA); Stimson Lumber Company (OR); Swanson Group (OR); Weyerhaeuser Company (WA); Carpenters Industrial Council (OR); Giustina Land and Timber Company (OR); and Sullivan Forestry Consultants, Inc. (GA).

The National Lumber and Building Material Dealers Association is calling for cooler diplomatic heads to prevail.

"NLBMDA continues its call for the U.S. and Canada to reach a new long-term softwood lumber agreement," said Jonathan Paine, President & CEO of the National Lumber and Building Material Dealers Association (NLBMDA). "Both sides should work cooperatively toward a resolution that ends the trade dispute and provides predictability and stability to the housing industry."

NLBMDA supports a new SLA that helps meet domestic demand for softwood lumber, does not put American lumber producers at a competitive disadvantage, unnecessarily restrict the availability of products, or increase the cost of housing to the detriment of prospective home buyers and consumers, it said in  a statement.

According to the NLBMDA, lumber prices have increased over the past year in anticipation of duties being placed on Canadian softwood lumber imports into the U.S. The Random Lengths Framing Lumber Composite price is now $437 per thousand board feet, up 26% over last year.