The U.S. Department of Commerce (DOC) is preliminary set to increase antidumping (AD) and countervailing duties (CVD) on Canadian softwood lumber following AD and CVD administrative reviews. The increase could take place at the end of November and would double the current duties if implemented. The current average tariff for softwood lumber imports from Canada is about 9%.
While DOC invites parties to comment on the preliminary results, many members of Congress already believe that the current tariffs do not seem reasonable at a time when lumber prices have risen 300 percent in the past year due to increased demand during the COVID-19 pandemic. A total of 96 House members signed a letter on May 17th asking the U.S. Trade Representative (USTR) to negotiate an agreement with Canada to remove the tariffs. Earlier in May, the Senate also issued a letter to USTR requesting the end of countervailing duties.
Canada’s trade minister, Mary Ng, issued a statement on May 21st stating, “The United States has always relied on Canadian lumber products to meet its domestic needs for high-quality building materials — and with the overwhelming demand from construction markets over the last year, this has never been more true. The U.S. Department of Commerce’s preliminary results of its second administrative review suggest its intention to significantly increase duties on Canadian softwood lumber later this year. This is entirely unjustified and will hurt consumers, businesses and workers on both sides of the border…. We remain confident that a negotiated solution to this longstanding trade issue is not only possible, but in the best interest of both our countries.”
On the other hand, the U.S. Lumber Coalition believes that the duties create American jobs due to lumber mill expansion. According to U.S. Lumber Coalition Co-Chair Jason Brochu, “More lumber being manufactured in America to meet domestic demand is a direct result of the trade enforcement, and we strongly urge the Administration to continue this enforcement.”
Deringer will continue to keep you updated on this situation. If you have questions regarding AD/CVD or how these possible changes may affect your shipments, please reach out to a Deringer customer service center or Deringer’s Compliance Department.