The uncertainty surrounding the fate of Canadian softwood lumber tariffs continues, as the U.S. Department of Commerce announced it is extending the deadline for preliminary determination on antidumping duties from May 4 to June 23, Bloomberg reported.
The extension meets the committee’s request for more time to research the issue. Shares of Seattle-based wood products company Weyerhaeuser fell nearly 2% in response.
A decision on countervailing duties is expected this week. Despite the delay in the antidumping duties, expectations are that the combined penalties will be high, possibly as much as 45%. The combined rate will be set in November and confirmed in January 2018, according to the CBC.
Since the expiration of the U.S.–Canada Softwood Lumber Agreement in October 2015 and its grace period in October 2016, the industry has been bracing itself for fallout from the uncertainty in the form of higher prices and potential supply volatility. Already, lumber prices are climbing, up 2.3% in March and 4.8% in February, according to the National Association of Home Builders.
Bloomberg reported that the dispute could severely impact builders, as import penalties could further drive up lumber prices that they must either absorb or pass along to consumers. One Dallas builder has so far seen lumber costs for a 3,300-square-foot home climb $4,500 since late 2016.
With the fate of the agreement in limbo and the Trump administration’s focus on supporting domestic producers and suppliers, the Canadian wood industry is starting to look for new outlets for its exports, including China, CTV News reported.
The NAHB is sounding the alarm. In a statement calling for a long-term solution, the association noted that, since more than one-third of lumber used in the U.S. is imported, a move by Canada to send its supplies elsewhere could severely impact the U.S. residential construction industry and its ability to supply affordably priced housing.