US to impose more tariffs on Canadian lumber imports

Bloomberg

The US will impose further punitive tariffs on imports of softwood lumber from Canada, escalating a longstanding trade dispute that’s already led to higher timber prices.
Preliminary anti-dumping duties of as much as 7.7 percent will be levied on Canadian producers, the US Department of Commerce said in a statement. The move follows the government’s decision in April to slap countervailing tariffs of up to 24.1 percent on shipments from Canadian companies including West Fraser Timber Co. and Canfor Corp.
Until Canada and the US reach a negotiated solution on softwood lumber, the nation will continue to “vigorously apply” the anti-dumping and countervailing duties to “stand up for American companies and their workers,” US Secretary of Commerce Wilbur Ross said in a statement.
Canada is the world’s largest softwood lumber exporter and the US is its biggest market. The trade spat, which has been going on intermittently for decades, was reignited in November when the US lumber industry filed a petition asking for duties. The group alleges Canadian wood is heavily subsidized and imports are harming US mills and workers. Since then, trade between the two countries has become an increasingly fraught issue, with President Donald Trump seeking to renegotiate the North American Free Trade Agreement.
“It’s something we take very, very seriously and we’ll endeavor to work very, very hard on with the American administration,” Canadian Prime Minister Justin Trudeau said in a press conference in Ottawa. “That’s what we’re going to be working on throughout the summer as we hope to come to agreements on a number of files that are outstanding, including the softwood lumber file.”
The US Department of Commerce said in its preliminary determination that it calculated that Canfor is selling product in the US at 7.72 percent less than fair value, Resolute FP Canada Inc. at 4.59 percent, Tolko Industries Ltd. at 7.53 percent and West Fraser at 6.76 percent. It set a preliminary dumping rate of 6.87 percent for all other producers in Canada.
The tariffs came in below expectations of 10 percent to 15 percent and are thus negative for lumber prices, RBC analyst Paul Quinn said in a note. Lumber prices have jumped this year amid concerns that the trade battle will disrupt supplies. Futures tumbled 2.5 percent to $334.50 per 1,000 board feet on Tuesday in Chicago, the lowest closing price since Jan. 31.