US Government Increases Tariffs On Canadian Softwood Lumber

The incoming Biden administration will need a strong trades secretary as there will be many fences to mend with trade partners from Trump’s America first policies.

Under the Trump administration, Canadian companies have been subjected to unfair tariffs resulting in major disruption in trade and the flow of goods back and forth between the two nations.

Whether it being aluminum or softwood lumber, the uncertainty of not knowing if the Trump administration would increase tariffs out of the blue, has put a significant strain on the relationship between Canada and the United States.

Today, Canadian lumber companies received another economic blow courtesy of the U.S. Department of Commerce. The department has imposed a new duty rate that will apply to exports from most companies subject to the first administrative review is 8.99%, compared to the current rate of 20.23%. Certain companies will also receive company-specific rates.

The new rates will apply on a going forward basis to softwood lumber exports to the United States from companies that were subject to the first Administrative Review.

Once any challenges before CUSMA Chapter 10 or U.S. courts have been resolved, these new duty rates will apply retroactively to softwood lumber exports to the U.S. from companies that were subject to the first Administrative Review.

“As we take deliberate action to contain COVID-19 and prepare for our economic recovery, it has never been more important to vigorously defend our forestry industries, which play an important part in the economies of Canada and Ontario.  

While the U.S. Department of Commerce has reduced duty deposit rates for many in the Canadian softwood lumber industry, we firmly believe that any rates of this sort are unfair and unjustified. These rates put the softwood lumber industry and the workers, families and communities that rely on it at an unfair disadvantage during this already difficult time.” John Yakabuski, Provincial Minister of Natural Resources and Forestry and Vic Fedeli, Minister of Economic Development and Trade

“While reduction in tariffs for some Canadian producers is a step in the right direction, Canada is disappointed that the United States continues to impose unwarranted and unfair duties on Canadian softwood lumber.” Mary Ng, Minister of Small Business, Export Promotion and International Trade

Canada will continue to work closely with the industry, the provinces and the federal government, using all available avenues to fight unfair rates on Canadian softwood lumber. Fair and open trade is most beneficial for consumers on both sides of the border. In the true spirit of free trade between Canada’s closest allies, the rate for trade should be zero – that’s the meaning of free trade.

More great reading