US Imposition of Softwood Lumber Duties Feared to Cripple Canadian Forestry Sector

SEATTLE (Scrap Monster): The US Department of Commerce (DOC) has announced its final tariffs on softwood imported from Canada last Thursday. The announced duties averaging at around 20.8% are feared to further intensify the economic tensions between the two countries. The hefty duty imposed by the US may impact softwood lumber exports from Canada and may impact the profitability of many lumber companies

The decision to impose Countervailing Duties (CVD) on most softwood exports from Canada was announced by the US Commerce Department on November 2^nd, stating that Canadian lumber mills have benefited from improper subsidies. It also ruled that the unfair dumping of goods at low prices have hurt the competing US mills. The final imposition of duties is subject to determination by the US International Trade Commission (ITC) during December this year on whether the American industry has been injured by Canadian softwood lumber imports into the country. The duties will be collected only if the ITC takes an affirmative stand on the current findings.

The US imposition of hefty duties has invoked strong reactions and opposition from many ends. Chrystia Freeland, Minister of Foreign Affairs, and Jim Carr, Minister of Natural Resources, in a joint statement, termed the decision as unfair, unwarranted and deeply troubling. While trying to continue their efforts for a negotiated agreement on softwood lumber trade with the US counterparts, the country will also consider legal action in order to protect the country’s forestry sector, they said.

Meantime, Ken Neumann, United Steelworkers (USW) National Director called the decision ‘completely unjustified’. Citing that the decision would be crippling for the Canadian forestry industry workers, Neumann called upon the country’s government to do the needful to protect its forest-dependent communities. Bob Matters, USW Wood Council Chairperson noted that the decision is a major setback for the Canadian forestry sector. B.C, Ontario and Quebec are likely to be hit hard the most.

The New Brunswick Lumber Producers (NBLP) has urged the provincial government to act immediately on securing an exemption for the province from duties on softwood lumber. It highlighted that producers in other Atlantic provinces have already received exemption. The statement issued by NBLP states that the provincial exporters no face significant disadvantage when compared with other Atlantic Canadian producers. Further, the statement pointed out that this is the first time in history that New Brunswick has not been exempt from duties.