The U.S. Department of Commerce has announced a significant increase in the combined duty rate on Canadian softwood lumber products, raising it to 14.54 per cent from 8.05 per cent. This decision comes as a response to concerns regarding Canada’s alleged subsidization and dumping of softwood lumber products into the U.S. market.
The new duty rate will apply retroactively to exports made in 2022 and will impact future exports of softwood lumber products to the United States. Canadian lumber producers have already paid over C$9 billion in duties, which are being held in deposit pending the resolution of this dispute.
The U.S. government has consistently accused Canada of engaging in unfair trade practices by subsidizing its softwood lumber products and selling them in the U.S. at below-market prices. This has led to distortions in the U.S. softwood lumber market, negatively impacting U.S. sawmills and local communities.
In response to the U.S. decision, Canada’s Minister of Export Promotion, International Trade, and Economic Development, Mary Ng, expressed disappointment and criticized the increased duties as unjust and harmful to consumers and producers on both sides of the border. The Canadian government intends to challenge these duties through legal channels, including NAFTA, CUSMA, the U.S. Court of International Trade, and the WTO.
The escalation of duties poses challenges for Canada’s lumber industry, especially amid an already volatile market. It may force Canadian producers to seek alternative markets or consider reducing production. As the trade dispute continues, stakeholders from both countries are closely monitoring developments in hopes of finding a resolution that serves the interests of all parties involved.
