Canada slams latest U.S. lumber tariffs, calls measure unfair – National

Canada’s international trade minister is criticizing the U.S. Commerce Department for nearly doubling tariffs on softwood lumber, saying the move is unfair and unjustified.

Minister Mary Ng said the United States has significantly increased tariffs on softwood lumber from Canada, from 8.05% to 14.54%.

“The unfounded and unfair U.S. tariffs on softwood lumber unjustifiably harm consumers and producers on both sides of the border,” Ng said in a press release.

It is the latest salvo in a bilateral exchange that Ottawa has described as hampering efforts to improve the cost and supply of housing.

The increase in the combined “all others” duty rate has sparked a negative reaction from government and industry in British Columbia.

“We’ve said it from the beginning and we’ll say it again now: the only solution is to end unfair softwood lumber tariffs,” B.C. Forests Minister Bruce Ralston said in a news release.

The U.S. Department of Commerce, under the Tariff Act, determines whether goods are being sold at less than fair value or are receiving subsidies from foreign governments.

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Canadian lumber-producing provinces impose stumpage fees on timber harvested from public lands. U.S. producers, who are forced to pay market prices, say this amounts to an unfair subsidy.

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Canadian lumber producers have already paid more than $9 billion in duties, which are being held in escrow until this dispute is resolved.

The BC Lumber Trade Council said the increase couldn’t come at a worse time, making already difficult conditions worse.

“Increased U.S. tariffs on B.C. lumber products will exacerbate the extremely difficult conditions faced by B.C. producers and impact manufacturing operations, jobs and communities across the province,” said President Kurt Niquidet in a news release.

The softwood lumber dispute unfairly harms small, family-run businesses “who are innocent bystanders in this long-running conflict between U.S. landowners and international lumber companies,” said Andy Rielly, president of the Independent Wood Processors Association of British Columbia.

Its members buy their wood or logs on the open market, like American companies, a statement said. The association is asking Ottawa to negotiate a solution.

According to a CIBC analyst note on the softwood lumber tariffs, Ottawa or the Biden administration are unlikely to focus on resolving the issue as a trade dispute because it is not the primary cause of job losses in the industry in Canada. The analyst said the job losses are linked to less robust demand for lumber and fibre constraints in British Columbia.

Canada is taking legal action, challenging the tariffs through a Canada-United States-Mexico Agreement dispute settlement panel.

Ottawa has already won cases before World Trade Organization (WTO) dispute settlement panels arguing that its stumpage fee system does not constitute a subsidy. Last year, a North American Free Trade Agreement (NAFTA) dispute settlement panel found that aspects of the U.S. calculation of stumpage fees were inconsistent with federal law.

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The U.S. Commerce Department’s fifth administrative review of tariffs, released Tuesday, was slightly higher than the preliminary rate of 13.86% announced in February.

The new rate will likely be in effect until mid-August 2025, when the sixth administrative review rates will be applied.

The move was welcomed by the U.S. industry, including the U.S. Lumber Coalition, which said Canada’s actions were exacerbating bear market cycles.

“The United States does not need unfairly traded Canadian lumber imports to meet current levels of residential construction,” Andrew Miller, the coalition’s president, said in a news release.

Ng said it was in the interests of both Canada and the United States to find a lasting solution to the dispute.

“We will always fight for the best interests of Canadians and continue to use all means available to vigorously defend the workers, businesses and communities that depend on softwood lumber for their livelihoods,” she said.

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