US nearly doubles import duties on Canadian softwood lumber

The US dramatically increases tariffs on softwood lumber from Canada, setting the rate at 14.54 percent. The previous tariff was 8.05 percent.

The new rate was shared with trade groups and government officials on Tuesday, but was not immediately published in the U.S. Federal Register.

Mary Ng, Minister of Export Promotion, International Trade and Economic Development, called the increase disappointing in a written statement.

“Unfounded and unfair U.S. tariffs on softwood lumber unfairly disadvantage consumers and producers on both sides of the border. This latest measure will have a negative impact on workers and their communities,” Ng said.

In British Columbia, Forestry Minister Bruce Ralston expressed similar views as Ng.

“I am extremely disappointed with the U.S. Department of Commerce’s decision to increase unfair and unjustified tariffs on softwood lumber,” Ralston said.

In February, the U.S. Commerce Department said it planned to significantly increase the softwood lumber tax, to 13.86 percent. Tuesday’s change was even higher.

Under the U.S. Tariff Act, the Commerce Department determines whether goods are sold at a price lower than their fair value or whether they benefit from subsidies from foreign governments.

In Canada, timber-producing provinces impose stumpage fees on timber harvested on Crown lands. U.S. producers, who are forced to pay market prices, see this system as an unfair subsidy.

WATCH | Canada challenges ‘unfair and unfair’ US import duties on softwood:

Canada officially challenges ‘unfair’ US tariffs on softwood lumber

Canada has formally filed a lawsuit challenging U.S. import duties on Canadian softwood lumber, which it considers “unjustified and unfair,” under the dispute resolution system of the U.S.-Mexico-Canada trade agreement.

On Tuesday, the US Lumber Coalition, an industry group, said the Commerce Department’s tariff decision “substantiates that Canada continues to subsidize and dump its softwood lumber products in the United States.”

The coalition said in a statement that Canadian practices are distorting the U.S. softwood lumber market, impacting sawmills, their workers and communities in the United States.

“Timber demand and prices are at historic lows and sawmills across the country are struggling to stay afloat,” said Andrew Miller, chairman of the coalition.

Kurt Niquidet, president of the BC Lumber Trade Council, said the US Lumber Coalition’s claims were unfounded. He also called the decision to nearly double the tax on Canadian softwood lumber disappointing.

“It’s very difficult, right? BC is a high-cost producer. We’re facing a number of challenges and this is just adding the cost of shipping wood to the U.S. So it’s going to impact production, it’s going to impact the workers and the communities that rely on the forestry sector,” Niquidet said.

Niquidet, Ralston and Ng all vowed to challenge the U.S. decision through litigation under the North American Free Trade Agreement (NAFTA) and the Canada-United States-Mexico Agreement (CUSMA) in the U.S. Court of International Trade and the World Trade Organization.

“It is in the interests of both Canada and the United States to find a lasting solution to this longstanding dispute,” Ng said.