The US International Trade Commission (ITC) has concluded that the United States should proceed with the introduction of anti-dumping and countervailing duties on softwood lumber from Canada.

The completion of the ITC's investigation concludes the process needed to justify that the duties are proportionate and lawful, with the Department of Commerce earlier concluding that Canadian lumber was being sold into the US market at less than fair value. In its December 7 final decision, the US ITC agreed.

However, the Commission also made a negative finding concerning critical circumstances with regard to less than fair value imports of this product. As a result, imports of softwood lumber from Canada will not be subject to retroactive antidumping duties.

Canada is the leading exporter of softwood lumber to the US, with exports to the US of USD5.8bn in 2016. Canadian exports satisfy about a third of US domestic demand of USD17.9bn. The final tariff rate will be about 20 percent for most producers.

Dumping occurs when goods are sold into a foreign market at below the prevailing market rate in the exporter's domestic market. Countries can respond by levying taxes on imports to prevent unfair competition for their domestic producers, known as anti-dumping duties. To counteract unfair subsidies, countries may also introduce countervailing duties.

Commerce's earlier final determination stated that exporters from Canada had sold softwood lumber in the US at between 3.2 percent and 8.89 percent less than fair value. In addition, it concluded that Canada is providing unfair subsidies to its producers at rates from 3.34 percent to 18.19 percent.

Source: Tax News