While President Donald Trump has so far excluded Canadian softwood lumber from the list of products facing tariffs, the U.S. government plans to more than double duties on the Canadian import.
The U.S. Department of Commerce has announced plans to increase duties on Canadian lumber from the current level of 14.45% to the new level of 34.45%, according to news reports. When the duty increase will take place is unclear.
The higher duties were announced after the Commerce Department determined that Canadian lumber was subsidized by the Canadian government and was being dumped on the U.S. market.
The long-simmering lumber dispute between the U.S. and Canada has been in the spotlight recently as the Trump administration has pushed for tariffs on Canadian products. The National Association of Home Builders (NAHB) states that about 30% of the wood used in home construction is imported, and Canada supplies about 80% of that wood.
If tariffs are placed on Canadian softwood, NAHB maintains that the price for building a house could increase by thousands of dollars. But the cost of that Canadian lumber will rise anyway if the new duties are put in place.
According to Bloomberg, the U.S. argues that provincial governments in Canada subsidize the industry by setting low fees for cutting trees on government land. The U.S. stated that these “stumpage” rates undercut the market. Canada denies the claim.
The U.S. Lumber Coalition, an alliance of softwood lumber producers, maintains that Canada is causing “egregious harm” to the U.S. timber industry through its dumping and subsidies practices. The coalition also claims that its members could, over time, supply all the softwood lumber needed in the U.S.
“These unfair trade practices are designed by Canada to maintain an artificially inflated U.S. market share for Canadian products and force U.S. companies to curtail production, thereby killing U.S. jobs,” stated Andrew Miller, owner and chairman of Stimson Lumber Co. and chairman of the U.S. Lumber Coalition.
