US Introduces Tariffs on Canadian Softwood Lumber

By: Laura Steiner

The United States has introduced countervailing duties on Canadian Softwood lumber.  A report from the U.S. Commerce department alleges that Canadian softwood lumber imports are unfairly subsidized. The duties beginning at 24%, will begin next week.

It’s the latest in a dispute that has lasted decades.  Lumber producers in the United States insist that Canada unfairly subsidizes its industry because producers in British Columbia, Alberta, Ontario, and Quebec are able to take wood from public lands. “Left unchecked, Canadian non-market based trade practices would yield ever increasing market share for Canadian product, displacing U.S. producers, workers, and landowners, and even allowing Canadian mills to take over U.S. assets,” The U.S. lumber coalition said in media reports.

Duties being assessed to four producers who are viewed to hurt the U.S. industry the least.  Canfor: 20.26%, Resolute 12.82%, Tolko: 19.50%, and West Fraser: 24.12%.  Other producers will be charged duties of 19.88%.  The single exception appears to be J.D. Irving who has asked for a separate review of its operations.

Ontario Determined to Stand up for Forestry Sector

In response Ontario has named a former federal Trade Minister as its Chief Negotiator for the Softwood Lumber talks.  Jim Peterson served in the post for three years under Prime Minister Paul Martin. “Having dealt with the Softwood IV negotiations, I’m well aware of the complexities and competing interests and feel confident I can fight for a good deal for Ontario,” he said.

The province has announced an increase of $20 million in funding for construction, and maintainence of forest access roads.  “Fair, and open trade benefits people and business on both sides of the Canada-U.S. border,” Premier Kathleen Wynne said.  Trade between the two countries is worth $ 2 billion/ year.  Ontario exports 85% of its goods to U.S. markets.

Canadian trade has been President Donald Trump for the last several days.  He tweeted comments about the dairy industry warning of actions to come.  “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult.  We will not stand for this.  Watch!” he said on April 25.

The Trump administration has said it would like to renegotiate the North American Free Trade Agreement (NAFTA).  The Canadian dollar closed at 73.72 cents US, a decline of .29 cents over Monday’s close in response to the tariffs.

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