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U.S. Sets Final Import Duties on Canadian Softwood Lumber

Posted November 02, 2017

Ahead of a November 14th deadline, the U.S. Commerce Department today announced affirmative final determinations in antidumping and countervailing duty investigations of softwood lumber imports from Canada. The determinations were postponed back in August when Commerce Secretary Wilbur Ross suggested hopefully that an extension of several months “could provide the time needed to address the complex issues at hand and to reach an equitable and durable suspension agreement.”

Unfortunately, that turned out not to be the case and, as a result, the investigations were continued and final determinations were reached, Commerce said in a statement.

“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” said Ross, adding that the decision “is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”

Commerce said it determined that exporters from Canada have sold softwood lumber in the U.S. at 3.2% to 8.89% less than fair value. It also said governments are providing unfair subsidies to Canadian softwood lumber producers at rates from 3.34% to 18.19%. Duties on Canfor and Tolko will therefore be just over 22%, while Resolute will see duties totalling just under 18% and West Fraser will see duties of more than 23%. All other producers will see duties of just under 21%. Customs and Border Protection will accordingly be instructed to collect cash deposits from lumber importers based on those final rates.

A fact sheet issued by the department also indicated that it found “critical circumstances” in the AD investigation for certain Canadian exporters but not others. “Consequently, Commerce will instruct CBP to impose provisional measures retroactively on entries of softwood lumber from Canada, effective 90 days prior to publication of the preliminary determination in the Federal Register, for the affected producers and exporters,” the fact sheet states.

The Canadian government responded by saying it will continue to defend the lumber industry against protectionist trade measures. “The U.S. Department of Commerce’s decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted and deeply troubling,” Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said in a joint statement.

“We urge the U.S. administration to rescind these duties, which harm workers and communities in Canada. These duties are a tax on American middle class families too, whose homes, renovations and repairs will only be more expensive.”

The ministers said the government will turn to litigation if required to defend the industry and fully expects to prevail as it has in the past.

“We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action.”

The U.S. Lumber Coalition, which initiated the case in November 2016, lauded the Commerce determinations. “We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field,” the group’s co-chair, Jason Brochu, said in an e-mailed statement. “The massive subsidies the Canadian government provides to their lumber industries have caused real harm to U.S. producers and workers.”

The U.S. International Trade Commission is tentatively expected to make a final injury determination in the softwood lumber case on December 7. An affirmative decision by the USITC would lock in the duties set by Commerce and lead to the issuance of AD and CVD orders. However, in the remotely improbable event that a negative final injury determination is made, the investigation would be terminated with no duties assessed.