Canada’s international trade minister says newly reduced duties on softwood lumber imported to the United States are “a step in the right direction,” but added any additional fees are “unwarranted and unfair.”
The U.S. Department of Commerce on Tuesday set a new duty rate of 8.9 per cent on average after completing its first administrative review on softwood lumber imports from Canada.
The new rate is down from the original 20.2 per cent average duty imposed in 2017 by the U.S., which alleged Canada was both unfairly subsidizing its industry and then dumping wood into the U.S. at unfair prices.
“While reduction in tariffs for some Canadian producers is a step in the right direction, Canada is disappointed that the United States continues to impose unwarranted and unfair duties on Canadian softwood lumber,” International Trade Minister Mary Ng said in a statement Tuesday.
“These duties have caused unjustified harm to Canadian businesses and workers, as well as U.S. consumers.”
Ng said her ministry will continue to seek a negotiated settlement with the U.S. through both the World Trade Organization (WTO) and the new Canada-U.S.-Mexico Agreement. She said a settlement is “not only possible, but in the interests of both our countries.”
Ng has joined Prime Minister Justin Trudeau and other federal government officials in saying the U.S. duties have only served to drive up construction costs on both sides of the border, further hurting a lumber industry already impacted by climate change and other issues like pine beetle infestations.
British Columbia Premier John Horgan, whose province’s lumber industry has been particularly struggling in recent years, said the news of the reduced duties was “welcome” but echoed Ng’s criticism.
“While this reduction in duties will bring much needed relief to our industry, any duties applied to our softwood lumber exports to the U.S. are unjustified,” he said in a statement.
The BC Lumber Trade Council called the remaining duties “frustrating and disappointing,” and said U.S. demand for lumber has outpaced domestically produced product.
“That’s why it is so unfortunate that the ongoing actions of the U.S. industry resulting in these unwarranted tariffs are placing an added cost burden on consumers,” council president Susan Yurkovich said.
In its own statement, the U.S. Lumber Coalition argued the reduced duty rate “understates true levels of subsidies and dumping” by the Canadian industry and expressed hope the rate will increase after the completion of a second review, which began in March.
“The U.S. lumber industry will continue to push for the trade laws to be enforced to the fullest extent possible in the second administrative review to allow U.S. manufacturers and workers the chance to prosper,” coalition co-chair Jason Brochu said.
In August, the WTO ruled against the U.S. duties, saying the Trump administration could not properly back up its claims about Canada’s lumber industry.
The U.S. said it would appeal the decision despite refusing to appoint new members to the WTO appeal board, making it impossible for the case to be resolved.
This is the fifth time the U.S. has gone after Canada’s softwood industry since 1982. In most of the previous disputes, Canada has won before international tribunals and the two countries reached joint settlements.
The most recent agreement expired in 2015 but the U.S. agreed not to do anything about it for at least one year. The U.S. Lumber Coalition initiated a complaint less than a month after that moratorium ended.
Global News has reached out to the transition team of U.S. president-elect Joe Biden for comment on how he plans to address the dispute when he takes office in January.
— With files from the Canadian Press