Commerce Rules All Cedar Shakes & Shingles Exempt From Softwood Lumber Duties

Trade Update • MARCH 16, 2021

In a final scope ruling issued last Friday, the U.S. Department of Commerce decided to affirm once again that all cedar shakes and shingles (CSS) are exempt from antidumping and countervailing duties on softwood lumber from Canada, not just certain categories or grades, as had been argued by U.S. producers.

Background

The question of whether Canadian cedar shakes and shingles are within the scope of existing U.S. softwood lumber duty orders (“the Orders”) has been a matter of dispute since 2018 when U.S. Customs and Border Protection first began assessing AD/CV duties against these products.

The Shake and Shingle Alliance (SSA), a trade lobby group representing U.S. importers, sought to overturn CBP’s unprecedented move—CSS had never been captured in previous softwood lumber disputes—by requesting a scope ruling. Initially, however, Commerce backed up the agency’s decision, determining that CSS were within the scope of the Orders.

Following a successful challenge by the SSA, the U.S. Court of International Trade ordered Commerce to revisit its scope determination; which it did in a final redetermination that CSS are not covered by the scope of the Orders.

That would have been the end of the story had not Commerce subsequently “clarified” the decision in a series of directives given to CBP, which served to narrow its applicability; first, to a specific type of CSS, then, to an exclusive group of manufacturers, and finally, to an even more specific description of the products in question (including three egregious typos in listing the grades covered).

In view of the uncertainty created by these progressively limiting instructions from Commerce, the Government of Canada filed a scope ruling request at the end of last year, seeking to obtain a clear and definite outcome with respect to the treatment of Canadian CSS products (that would apply to all Canadian producers).

Why It Matters

The ruling is significant in that it delivers the “clear and definite outcome” sought by the Canadian Government and allied trade groups.

By simply excluding all Canadian cedar shakes and shingles from the Orders, the ruling removes any lingering uncertainty for importers about whether their products qualify for exemption from the AD/CV duties applicable to softwood lumber.

This also means that any cash deposits paid on prior shipments of CSS should now be refunded to any company (not just members of the SSA or Cedar Shake and Shingle Bureau, as had been stipulated) and/or whose goods fell outside the narrow product definition Commerce had previously established.

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