Quebec Standard

Thursday, December 9, 2021

U.S. hikes duty on Canadian softwood lumber duty jumped to 17.9%, twice the old rate imposed by the U.S.

Officials from several Canadian governments and the timber sector are disappointed that the United States has decided to proceed with a plan to increase the tax it levies on softwood lumber imported from Canada.

The U.S. Department of Commerce announced on Wednesday that it would proceed with taxes of 17.9% on average on softwood timber imported from Canada. That’s up from the previous figure of 8.99 per cent.

The U.S. government announced in May that it planned to raise the rate to 18.32 per cent, but after more review during the summer, the agency opted to scale back that plan while still doubling the tax.

Because Canadian timber producers are subsidized, the U.S. claims they can dump their product into the U.S. at a lower price than American lumber manufacturers can. As a result, the United States imposes a duty on all softwood timber from Canada, raising its retail price and encouraging consumers to buy American wood.

Canada has consistently denied those charges, and numerous trade tribunals have ruled in its favour. “At every step of the way, rulings have found Canada to be a fair trading partner,”  International Trade Minister Mary Ng said in a statement, expressing Ottawa’s “disappointment” with the decision.

According to official government statistics, Canada exports around $8 billion worth of softwood lumber to the rest of the globe each year. The United States is the biggest single purchaser of it.

Ng claims that Canada would continue to defend the industry against unfair duties, including through lawsuits under CUSMA, NAFTA’s predecessor, and the World Trade Organization. The WTO ruled in Canada’s favour on the issue in the recent summer of 2020.

Source: CBC News

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