Ruling would see tariff jump to 18.3%, group says

The U.S. Department of Commerce issued new preliminary rulings on antidumping tariffs on Canadian softwood lumber imports that would double the current duties if implemented.

Commerce's International Trade Administration has calculated a preliminary duty of 18.32 per cent, but the current 8.99 per cent rate remains in place, because a final determination hasn't been made, a Commerce official said. The final antidumping and countervailing duties differ from the initial calculation as comments and case briefs are taken into account. The determination will only come later in the year.

A push to double tariffs on wood imports comes as U.S. demand outstrips supply in a time of surging residential construction, causing lumber prices to more than triple in the past year. The rally has driven up costs for building new houses and threatened to push some homebuyers out of the market.

The National Association of Home Builders has urged the Biden administration to negotiate a new trade deal with Canada to secure supplies and halt further hikes.

“We find the significant increase in today's preliminary rates troubling,” Susan Yurkovich, president of the BC Lumber Trade Council, said. “It is particularly egregious given lumber prices are at a record high and demand is skyrocketing in the U.S. as families across the country look to repair, remodel and build new homes.”

As U.S. producers remain unable to meet domestic demand, the ongoing actions of the industry, resulting in these unwarranted tariffs, will ultimately further hurt American consumers by adding to their costs, said Yurkovich, whose organization represents lumber producers in British Columbia.

The two nations have had decades of disagreement over the issue, with the U.S. alleging its northern neighbour unfairly subsidizes lumber production. In 2019, the World Trade Organization said the U.S. violated international trade rules in the way it calculated tariffs on Canadian imports of softwood lumber.

The combined rate — which the U.S. first instituted in January 2018 — was cut to 8.99 per cent from 20.23 per cent in November.

B.C.'s government said it was concerned about the continued effects these “unjustified punitive duties” are having on the western Canadian province's forest industry. A notable portion of U.S. lumber imports are produced in B.C.

Canadian lumber producers should see reduced profitability later in the fourth quarter as duty rates more than double to levels a bit higher than expected, CIBC analyst Hamir Patel said in a note.