Canada Upset Over American Lumber Duties

( – According to The Globe and Mail, Canada supplies the United States with roughly 22% of its wood, and its businesses run about 35% of US-based lumber companies. The northern neighbor’s growing hold on the industry led to a power struggle starting in the early 1980s, with the US finally imposing tariffs in 2017. Canadians, upset over the continued imposition, want an end to the hefty fees.

Most Canadian softwood lumber comes with a 7.99% duty tax according to Reuters. US restrictions on the vital building material have increased over the past 25 years, the result of countervailing duty and antidumping laws. These provisions are in place to protect the United States from economic damages resulting from Canadian subsidies as well as the effects of foreign price fixing below US market values. The two countries have gone back and forth over the past few years, each struggling to gain a better foothold on the situation, but the dispute doesn’t appear to have an end in sight.

International Trade Minister Mary Ng, along with Canada’s top lumber company CEOs, had hoped to resolve the issue during the March 23-34 Ottawa summit between President Joe Biden and Prime Minister Justin Trudeau, but US lobbyists claiming to protect jobs south of the countries’ common border were able to block the attempt. The tariffs have reportedly resulted in reductions in US lumber purchases over the last year. Former international trade minister, David Emerson, called the decision to continue imposing the taxes a political one rather than a true trade battle. Canada has taken the US to court multiple times, attempting to use fair trade provisions in the World Trade Agreement and North American Free Trade Agreement to its benefit, but the legal costs have allegedly been an issue.

Fast Markets notes that skyrocketing mortgage rates, along with fewer numbers of repairs and remodels, also have contributed to the reduced Canadian lumber sales. Additionally, the United States has increased its wood imports from other countries, such as Germany and Sweden, over the past year.

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