The US Commerce Department has announced its preliminary decision on imports of Canadian softwood lumber and is set to impose anti-dumping duties of up to 7.7%.
Preliminary anti-dumping duties of as much as 7.7% will be levied on Canadian producers, the U.S. Department of Commerce said Monday in a statement.
These new anti-dumping duties, which range from 4.59 per cent to 7.72 per cent, are in addition to the preliminary countervailing duties of 19.88 per cent imposed in April that are set to expire on August 27. Canada, which denies it subsidizes producers, said earlier this month it would give C$867 million ($654 million) in aid to the domestic industry.
West Fraser will have the highest combined duties at 30.88 per cent, followed by Canfor at 27.98 per cent and Tolko at 27.03 per cent.
By the end of 2017, softwood lumber will cost nearly 7% more to sell to the U.S.
But Susan Yurkovich, CEO of the B.C. Lumber Trade Council, said layoffs and job cuts will be avoided for the most part until the US government sets final duty rates later this year - unless lumber prices suffer a precipitous decline.
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But long-time trade irritants such as lumber and dairy with Canada may weigh heavily on how fast those discussions move forward despite the advance work being done by coalitions of U.S., Canadian and Mexican business groups to smooth the process.
Canada's current share of the USA market has been shrinking. In June, the Canadian government announced it would provide almost $1 billion in additional subsidies to the Canadian softwood lumber industry.
With a Canadian softwood lumber industry that has seen its market share in its largest market decrease from 31% last year to just 27% this year, many analysts are expecting continued drops as large Canadian producers shift from Canadian production toward buying American mills and producing more product south of the border.
The bilateral dispute is the fifth over lumber in less than 40 years. This represents significant progress in this longstanding dispute; however, we will continue to press our U.S. counterparts for the removal of duties for all provinces and would welcome a commitment by the U.S. Department of Commerce to consider an exclusion for New Brunswick.
"The ongoing allegations levelled by the US industry are without merit".
NDP MP Nathan Cullen says eliminating as many Canadian companies as possible is the main goal of the US action, and says there are already mills in his northern B.C. riding that can't afford the duty bills handed them by the U.S. The government says Canada has always prevailed against the accusations before the World Trade Organization or under the North American Free Trade Agreement.