The U.S. increases tax on Canadian softwood logs to 17.9%

Key takeaways:

Continuous trade conflict goes following decades.
Canada ships around $1.2 billion value of softwood logs to the U.S. each year.
The U.S. is increasing the value of duty to as much as twice the early rate.

US’ increased value in duty:

Directors from several Canadian governments and the timber industry are showing frustration that the U.S. has selected to go forward with a project to increase the value of duty it inflicts on softwood lumber that comes from Canada.

On Wednesday, the U.S. Department of Commerce stated it will continue to tax duties of 17.9 per cent, on average on softwood lumber shipped from Canada. That’s twice the earlier 8.99 per cent rate.

In May, the U.S. government stated it intended to increase the rate to 18.32 per cent, but after additional analysis across the summer, the agency chose to ratchet down that idea, but still increase the tax.

The U.S. says Canadian lumber generators discharge their product into the U.S. at a cheaper price than American lumber firms can because they are financed. So the U.S. puts a tax on all softwood lumber from Canada to increase its price at the local level, which helps customers to purchase American wood.

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Canada has long denied those charges, and several trade courts on the matter have been found in Canada’s support.

“At every step of the way, rulings have found Canada to be a fair trading partner,” International Trade Minister Mary Ng stated in a press release, in which she showed how “disappointed” Ottawa was in the settlement. Source – cbc.ca

“The United States has long relied on Canadian lumber products to meet its domestic needs for high-quality building materials,” Ng stated. Source – cbc.ca

“These unjustified duties harm Canadian communities, businesses, and workers. They are also a tax on U.S. consumers, raising the costs of housing, renovations, and rentals at a time when housing affordability is already a significant concern for many.” Source – cbc.ca