The U.S. confirmed punitive tariffs on imports of softwood lumber from Canada as the 2 nations stay at an deadlock over a commerce settlement, though the penalties might be decrease than beforehand indicated.
Final common countervailing duties of 14.25 % and anti-dumping duties of 6.58 % might be levied on Canadian producers, the U.S. Department of Commerce stated Thursday in a press release. The transfer follows the federal government’s determination earlier this yr to impose mixed duties of as a lot as 31 % on shipments from Canadian firms together with West Fraser Timber Co. and Canfor Corp.
“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” Commerce Secretary Wilbur Ross stated within the badertion.
The imposition of the duties confirms hypothesis within the Canadian lumber trade that the prospects for a commerce deal within the close to future are distant.
The duties are “unfair, unwarranted and deeply troubling,” Chrystia Freeland, Canada’s Minister of Foreign Affairs, and Jim Carr, Minister of Natural Resources, stated in a joint emailed badertion. “We urge the U.S. Administration to rescind these duties, which harm workers and communities in Canada.”
Still, Canadian shares responded positively for the reason that duties got here in decrease than many had been anticipating, stated Kevin Mason, managing director of Vancouver-based ERA Forest Products Research. Canfor gained as a lot as three.1 % to C$26.43, the best value since July 2015, whereas West Fraser rose 2.6 %.
The commerce challenge will in all probability not be resolved within the close to time period because the renegotiation of the North American Free Trade Agreement has taken heart stage, Mark Wilde, an badyst with BMO in New York, stated Wednesday in an e-mail.
Canada is the world’s largest softwood lumber exporter and the U.S. is its largest market. The commerce dispute has been an intermittent supply of friction for years and was reignited in 2016 when the U.S. lumber trade filed a petition asking for duties. The group alleges Canadian wooden is closely sponsored and imports are harming U.S. mills and employees.
“We’re in for a very long battle” earlier than a ultimate commerce deal is reached, ERA’s Mason stated. “You’d hate to think you’re going to have another five-year battle like we did last time around, but I can’t see why it’s going to be any different.”
The dispute helped to spark a surge in lumber costs within the U.S., with the elevated uncertainty over provides coming concurrently a restoration within the American housing market. Lumber has traded at a 13-year excessive this week and has gained about 35 % this yr, making it among the finest performing commodities, based on information tracked by Bloomberg. Chicago futures fell by the change restrict on Thursday.
“We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field,” U.S. Lumber Coalition co-chair Jason Brochu stated in an emailed badertion. “The mbadive subsidies the Canadian government provides to their lumber industries have caused real harm to U.S. producers and workers.”
— With help by Josh Wingrove