TORONTO – The U.S. Department of Commerce issued its final finding Thursday on the softwood lumber duties Canadian producers must pay, escalating a trade dispute amid the renegotiation of the North American Free Trade Agreement.
The department said most Canadian producers will pay a combined countervailing and anti-dumping rate of 20.83 percent, down from 26.75 percent in the preliminary determinations issued earlier this year.
Commerce Secretary Wilbur Ross said the decision “defends American workers and businesses from unfair trade practices.”
The department also said Canadian exporters sell softwood lumber at less than fair value and Canada provides unfair subsidies to producers.
Canadian Foreign Minister Chrystia Freeland called the duties “unfair, unwarranted and deeply troubling,” saying they harm workers in Canada.
“We urge the U.S. Administration to rescind these duties,” Freeland said in a statement. “These duties are a tax on American middle class families too, whose homes, renovations and repairs will only be more expensive.”
Canada may take legal action through dispute settlement mechanisms under the North American Free Trade Agreement and the World Trade Organization, but Freeland said officials continue to engage with their American counterparts about a negotiated settlement.
A 2006 softwood-lumber agreement expired in 2015.
The U.S. Lumber Coalition said they are pleased with the duties because it means the U.S. lumber industry “can compete on a level playing field.”
Susan Yurkovich, President of the British Columbia Lumber Trade Council, said the duties are driven by a protectionist U.S. lumber industry whose sole purpose is to constrain the imports of Canadian lumber and drive up prices for their own benefit.
“Unfortunately it’s the narrow interest of a few greedy lumber barons in the southern United States that has led to this impasse,” British Columbia Premier John Horgan said.
The U.S. and Canada typically enjoy a friendly trade relationship, but things have soured this year as U.S. President Donald Trump has demanded big changes to NAFTA, which is in its 23rd year.
There are growing doubts that it will survive through its 24th.
The Trump administration has threatened to withdraw from the agreement if it can’t get what it wants in a renegotiation. But its demands – which range from requiring that more auto production be made in the U.S. to having more government contracts in the NAFTA bloc go to U.S. companies – will likely be unacceptable to the U.S.’ two other NAFTA partners, Canada and Mexico.
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