Earlier this week, the U.S. Department of Commerce announced the final determination of antidumping and countervailing duties on imports of Canadian softwood lumber products into the United States.
The U.S. Lumber Coalition, an industry group, said it supports this development as it will proportionally counter the subsidies that the Canadian government provides its lumber industry in abuse of U.S. trade laws. Reaction by members of Canada's lumber industry was negative. New Brunswick’s JD Irving say they were unfairly singled out from among Canada's Atlantic provinces.
The combined final determination rates as announced by the U.S. Department of Commerce are: Canfor 22.13 percent; Resolute 17.90 percent; Tolko 22.07; W. Fraser 23.76 percent; Irving 9.92 percent; All Others 20.83 percent.
“This is another example of a complex system being upset by side effects,” said Gene Wengert, the Wood Dr. “We do not have enough wood in the U.S. to make all our houses, actually to frame our houses, so even with the tariff, we will continue to use huge amounts of Canadian lumber even though it will add over $5,000 to the cost of a new home. Note that the Canadian lumber species involved are used for framing of homes.
Wengert said that stateside builders do not use U.S. species like Southern pine for framing, as they are heavier, making them harder to nail and cut.
“It is estimated that over 80 percent of the framing lumber used in Georgia is Canadian, even though Southern pine is plentiful,” he said. “The real question is, ‘What options, besides paying 20 percent more, will we have when the Canadian softwood framing lumber costs 20 percent more?’ I wonder who gets this 20 percent that we pay as consumers.
“So, will the added home costs mean people will build a smaller home, spend less for flooring or cabinets, spend less for furniture, etc.? Or perhaps Canada will cut back on softwood framing lumber exports to the U.S. in favor of more exports to other countries?
“Or maybe Canada will cut exports of hardwoods to the U.S. in retaliation. Will the huge forest fires in western Canada also mean less exports to the U.S.?
“What if Canada retaliates by changing the oil amount or price that comes across the pipelines to the U.S., including Keystone XL and another one crossing into North Dakota?
“Higher lumber prices are indeed the effect of this action.”
In April, the U.S. Department of Commerce ruled that Canada subsidizes softwood lumber production, distorting the U.S. softwood lumber market to the detriment of U.S. sawmills, their employees and communities. The U.S. Lumber Coalition's statement can be found here.
Additionally, in June, the U.S. Department of Commerce ruled that exporters from Canada have sold softwood lumber to the United States at less than fair value based on factual evidence provided by the interested parties. The U.S. Lumber Coalition's statement on the antidumping duties can be found here.