The federal government in Ottawa is pushing back against the latest decision by the United States to continue imposing duties on Canadian softwood lumber. Canada has filed for a judicial review of the Commerce Department’s assessment of the levies, which International Trade Minister Mary Ng criticized as “unfair, unjust, and illegal.” Ng sees this move as an opportunity to escalate concerns and put pressure on the U.S. to consider a negotiated solution. She emphasized the importance of exploring new ways to resolve the issue and expressed the preference for coming to the negotiating table and reaching a deal. However, in the meantime, Canada will use all available tools to support the lumber industry.
The recent administrative review by the U.S. Commerce Department resulted in a slight decrease in the combined duty rate for “all others” but still maintained it at 7.99 percent. The issue stems from the disagreement between Canada and the U.S. regarding stumpage fees set by lumber-producing provinces in Canada. While Canadian producers argue that the fees are not subsidies, U.S. producers claim that they provide an unfair advantage. U.S. Trade Representative Katherine Tai has stated that negotiations can only happen if Canada eliminates its stumpage fee system.
The Biden administration remains committed to addressing the issue of “unfairly traded Canadian imports” and considers it a priority. They are open to discussing a new softwood lumber agreement with Canada, but Canadian producers need to establish a unified position for negotiations. Canada has previously successfully argued at World Trade Organization dispute panels that its stumpage-fee system is not a subsidy, reinforcing its belief that it is in the right.
Enforcement of trade laws is crucial for the long-term growth of the U.S. lumber industry, according to Andrew Miller, chairman of the U.S. Lumber Coalition. U.S. producers believe that the duties maintain a level playing field and support the domestic forestry and construction sectors. However, the coalition highlights that Canadian producers need to agree on a unified position to facilitate negotiations for a new agreement.
Overall, Canada continues to defend its interests against the tariffs and is actively seeking a resolution to the long-standing dispute with the U.S.
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