Duty Declared on Canadian Lumber
The Commerce Department said Friday that it will slap a 19% import duty on billions of dollars worth of softwood lumber from Canada, a decision that prompted a protest from the Canadian government.
The wood is used extensively in the construction of houses and home remodeling.
American home builders, who want a free flow of cheap lumber, immediately protested the move, saying the duty will mean higher prices on new homes.
But U.S. lumber industry officials countered that the intervention was needed to combat illegal subsidies being provided by all of Canada’s provincial governments, except the four maritimes. Those subsidies, they say, have contributed to U.S. mill closings and job losses.
This latest chapter in a trade fight that has been going on for at least 20 years brings an added bite to Canada. In declaring the new 19.31% countervailing duty, the Bush administration also found that Canada flooded the U.S. market with wood this spring, after trade controls expired.
As a result, the duty will be retroactive to early May, a Commerce Department official said.
Last year, Canada shipped 18.3 billion board feet of softwood lumber to the United States, valued at $6.4 billion and accounting for about a third of the U.S. market.
Canadian officials Friday accused the Bush administration of taking a protectionist approach to trade.
Trade Minister Pierre Pettigrew, saying the U.S. decision had “no basis in fact or law,” gave notice that his government is prepared to mount legal challenges to the new duty.
The duty, if upheld by the Commerce Department in a final decision set for Oct. 23, would cost Canadian lumber producers about $2 billion a year in lost business, according to industry officials there.
The National Assn. of Homebuilders claims the countervailing duty could add about $1,000 to the price of a new home.
But like all things related to U.S.-Canada lumber trade, that figure is disputed.
On Sept. 24, the department is supposed to announce its preliminary decision on whether anti-dumping duties as high as 38% should be added to the countervailing duties on Canada’s softwood lumber shipments.
