US finalizes Canadian softwood lumber tariffs
- The U.S. Commerce Department finalized tariffs on Canadian softwood lumber Thursday, which would add duties of 20% or more, The Wall Street Journal reported.
- Those tariffs will go into effect at the end of the month if U.S. trade officials confirm improper subsidies and dumping practices from Canada hurt the U.S. industry.
- Both U.S. and Canadian officials say they would prefer to reach a deal on lumber trade in order to circumvent tariffs.
The latest development reflects a similar proposal Commerce Department officials made in April that would have applied an average 20% tax on Canadian softwood lumber imports. That decision, made in response to countervailing claims, was expected to create $1 billion in revenue on imports valued at $5 billion annually.
In June, the department said it would impose another set of preliminary antidumping duties, ranging from 4.59% to 7.72% on certain imports. Together, the two duties would see an extra 17.41% to 30.88% added to imports' present cost.
The dispute follows a decades-long battle between the U.S. and Canada about whether the Canadian government subsidizes its producers, thus enabling them to sell to U.S. consumers at below-market rates. Before the countries' most recent legal tiff expired in October 2015, the deal had extracted antidumping and countervailing duties from Canadian softwood lumber imports. That deal required U.S. producers to return a portion of the revenue collected previously and saw Canadian producers adhere to certain limits when selling to the U.S.
Following the agreement, the countries instituted a one-year moratorium on legal action. During that time, U.S. and Canadian officials had intended to reach a new deal on imports. The deal didn't happen. Instead, U.S. producers continued to echo claims of countervailing and antidumping practices made by their Canadian competitors.
Meanwhile, the Trump administration is renegotiating the North American Free Trade Agreement (NAFTA) with Canada and Mexico. As part of those negotiations, the administration aims to cut a dispute resolution mechanism that reviews the tariffs and trade decisions imposed between NAFTA countries.
U.S. home builders have been some of those hardest hit by the ongoing dispute. A survey from the National Association of Home Builders in July found that 21% of single-family builders were having trouble accessing framing lumber — only 7% said the same in July 2015.
Throughout the year, the possibility of tariffs has inflated U.S. lumber prices. And with approximately one-third of the U.S. softwood lumber market originating from Canada, that rise has pushed the U.S. to look elsewhere to buy the product.
- The Wall Street Journal U.S. Sets Final Tariffs for Canadian Softwood Lumber
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