The US Department of Commerce announced increased duties on softwood lumber imports from Canada, escalating an ongoing trade dispute. The 14.54% rate is an increase from 8.05% and follows the US government’s annual review of levies.
Both the US and Canada have a lot at stake over softwood lumber. In 2020, around half of Canada’s $10 billion softwood lumber production was exported to the US, and 80% of softwood lumber imported to the US came from Canada. The softwood lumber manufacturing industry in the US, according to the Softwood Lumber Board, employs over 775,000 with an annual payroll of more than $46 billion.
The US claims that duties are justifiable since Canada unfairly subsidizes its lumber industry, allowing Canadian lumber to be sold in the US at artificially low prices and harming US producers and employees. Canada maintains that its lumber industry is not subsidized and argues that the US tariffs violate trade agreements. Canada’s Export Minister, Mary Ng, said, “US duties on softwood lumber unjustifiably harm consumers and producers on both sides of the border.”
Timber ownership and pricing are at the core of the Canada-U.S. softwood lumber trade dispute. The US Lumber Coalition, representing an alliance of over 500 lumber facilities, says unfair subsidies exist by provincial governments that own most Canadian timber. The Lumber Coalition puts the US industry at “420 million acres of timberlands owned by 10 million individual family forest landowners.”
In a statement, Andrew Miller, Chairman of the US Lumber Coalition, said the unfair “trade by Canada could not have come at a worse time for domestic producers.” Miller added, “Lumber demand and prices are at record lows, and mills across the country are struggling to keep afloat.”
According to data compiled by ConstructConnect, softwood lumber prices retreated in the US to multi-year lows, easing pressure on home construction costs.
As the dispute continues, Canada has promised to seek resolution under the World Trade Organization, the North American Free Trade Agreement (NAFTA), the Canada-United States-Mexico Agreement (CUSMA), and the courts.
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