Washington will double compensatory and anti-dumping tariffs on Canadian lumber, a move long expected but that has nonetheless disappointed Ottawa and could further drive up prices in the United States.

Most Canadian companies that export softwood lumber to the United States will have to pay 17.9 per cent duties, up from the current 8.99 per cent, according to documents from the US Commerce Department and the Canadian government.

‘Canada is extremely disappointed that the United States has decided to increase to 17.9 per cent the unfair duties it imposes on most producers of Canadian softwood lumber’ and ‘calls on the United States to put an end to it’, said Canadian international trade minister Mary Ng in a statement.

When contacted on Thursday by AFP for comment, the US Department of Commerce did not respond.

 
The decision will go into effect once it has been published in the Federal Register, the official list of US federal rules and public notices, which could happen next week.

The tariffs are reviewed annually, and Washington had published preliminary results in May.

The Quebec Forest Industry Council (QFIC) expects ‘additional upward pressure on the North American price of wood as well as on the Quebec forest industry’, according to a press release.

‘US consumers are the ones paying the price,’ QFIC CEO Jean-Francois Samray told AFP Thursday, indicating that ‘the United States cannot meet its domestic demand’.

The US National Association of Home Builders (NAHB) is concerned that ‘doubling the tariffs will only exacerbate market volatility, put upward pressure on lumber prices and make housing more expensive’.

‘Home builders are grappling with lumber and other building material supply chain bottlenecks that are raising construction costs,’ the association said.

Lumber prices have surged since the start of the pandemic. The United States is currently experiencing its worst inflationary surge in 30 years.

The US Lumber Coalition, on the other hand, welcomed the ‘commitment to strongly enforce the US trade laws against unfairly traded Canadian lumber imports.’

The dispute over lumber tariffs has plagued relations between Washington and Ottawa for 35 years.

US producers accuse their Canadian counterparts of selling wood below the market price to promote exports.

The case was brought before the World Trade Organisation (WTO), which ruled in favour of Canada in August 2020, but the United States appealed the decision the following month.

The United States and Canada are bound, along with Mexico, by a trade agreement: the USMCA free-trade bloc, which replaced NAFA on July 1, 2020.

Canada is the world’s largest exporter of softwood lumber, according to the country’s government. The United States is its largest market.

Source: NewAgeBD