Canada once again challenging U.S. lumber duties

Canada is once again initiating a formal challenge of American duties on Canadian softwood lumber.

Earlier this month the U.S. cut its countervailing duty rate on Canadian softwood lumber imports in half to about 8.5%, down from the previous 17.5% duty. Canada’s International Trade Minister Mary Ng recently filed notice of the challenge under the United States-Mexico-Canada Trade Agreement’s dispute resolution system, signaling Canada would continue to fight any countervail duties on softwood lumber products.

Drew Hassleback, a lumber industry analyst based in Vancouver, explained the dispute has always been about where softwood lumber trees are sourced.

“The fight here is where the wood comes from. In the United States, the wood comes from tree farms, which are owned by the companies that produce the wood themselves. In Canada, the lumber companies take their wood off of government-owned lands. The U.S. allegation is that, since the Canadian producers are taking the wood from government-owned land, they can just take the trees and off they go. The Canadian industry counters, and says ‘We actually pay for those trees.’ It’s called a stumpage fee, it’s a market rate. It’s calculated based on what the market price of the wood and the trees should be,” he said.

U.S. Trade Representative Katherine Tai said the U.S. is willing to discuss the issue, but one condition would have to apply - Tai wants Canada to address the provincial stumpage fee.

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