U.S. Ramps Up Lumber Trade Spat With Canada -- Update
June 26 2017 - 9:46PM
Dow Jones News
By Jacob M. Schlesinger in Washington and Paul Vieira in Ottawa
The Trump administration escalated its lumber trade tiff with
Canada, adding a new layer of duties on imports from its northern
neighbor, even as it said it still hopes to negotiate a settlement
before the full bite of the penalties is felt.
Two months after moving to impose 20% tariffs on Canadian
softwood lumber commonly used in single-family homes, the Commerce
Department announced Monday that it was considering additional fees
that would mean some products would face duties as high as
30.88%.
The Trump administration has accused Canada of unfairly selling
its lumber in the U.S. below production costs, aided in part by
improper government subsidies -- a trade practice known as
"dumping." The first round of duties was aimed at countering the
alleged subsidies, while the new round is aimed at other factors
that the U.S. says is fueling the alleged dumping.
Canada has denied the U.S.'s allegations, and Prime Minister
Justin Trudeau at one point said he would carefully consider
retaliatory measures against the U.S. The U.S. last year imported
more than $5 billion worth of softwood lumber from Canada.
The Commerce Department said that the duties announced Monday
were "preliminary" and that it would reach a final determination on
Sept. 7. The move could have an immediate effect on trade,pu as the
U.S. government will start collecting deposits from imports based
on the new ruling.
"I remain optimistic that we will reach a negotiated solution on
softwood lumber," U.S. Commerce Secretary Wilbur Ross said in a
statement announcing the new moves. But, he added, "until we do we
will continue to vigorously apply...laws to stand up for American
companies and their workers."
Canadian lumber producers on Monday said that while they viewed
the new duties as unjust, they were actually a bit relieved because
they were at the lower end of what the industry was expecting.
"We don't believe any duties are appropriate," said Susan
Yurkovich, president of the BC Lumber Trade Council, which
represents lumber producers in British Columbia, where half of
Canadian softwood exports to the U.S come from. The new round of
duties, she added, combined with what was previously announced,
will continue to "punish American consumers who are faced with
higher lumber prices when they buy, build or renovate their
home."
In a statement, Canada said it was "deeply disappointed" with
the Commerce department's decision. The duties imposed "are based
on a flawed rationale that is damaging to workers, communities and
consumers in Canada and the U.S."
Meanwhile, the U.S. Lumber Coalition, an industry lobby group,
said it applauded Washington's move to counter Canada's "unfair
trading practices."
While Mr. Ross and President Donald Trump have both prominently
highlighted the dispute, it actually dates back decades, and the
U.S. has repeatedly over the years taken measures to try to block
Canadian softwood.
The battle takes on an added significance this year, as the two
countries -- along with Mexico -- are also renegotiating the
23-year-old North American Free Trade Agreement. Some officials and
analysts have expressed concern that tensions over the timber trade
could complicate efforts to reshape the broader trading
relationship.
Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com and
Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
June 26, 2017 21:31 ET (01:31 GMT)
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