Canadian forestry faces 'massive threat' from double whammy of tariffs and new duties: B.C. premier
U.S. President Trump has ordered an investigation into lumber imports as new fees set to come into effect
Softwood lumber producers in Canada are bracing for a double whammy of tariffs of up to 25 per cent, which could be in effect as soon as Tuesday, as well as a new levy imposed by the U.S. Department of Commerce, which could come into effect in August.
British Columbia Premier David Eby called the news a "massive threat" to the province's forestry sector.
The levy is characterized by the United States as an anti-dumping measure and is part of a decades-long dispute between Canada and the United States over how softwood lumber is priced.
The new rate, announced by the U.S. Department of Commerce, is 20.07 per cent, up nearly three times from the previous rate set three years ago. That is in addition to a 6.74 per cent countervailing duty also in place, plus whatever tariffs may come into effect.
The announcement also comes shortly after Trump ordered a probe into U.S. lumber imports, signing a memo for a national security investigation to be launched into lumber and lumber products brought into the country, with a White House official arguing that reliance on imported lumber represents a possible national security risk.
Eby characterized the announcements as "biased" and called U.S. President Donald Trump's ongoing targeting of Canadian goods as "unwarranted attacks, and not how allies treat each other."
"The U.S. Department of Commerce's announcement today will impact all Canadian companies selling lumber to the United States, when and if the decision is confirmed later this summer. American homes will be more expensive to build, and hardworking people in our province will bear the brunt of these unwarranted duties. Both Canadians and Americans need an end to this trade dispute," he said.
Hundreds of jobs have already been lost across the province in recent years as mills have shuttered and scaled back, in part a response to a lack of access to U.S. markets.
The B.C. Lumber Trade Council says in a statement that the latest hike is unjustified and will further harm forestry workers and communities in Canada and further burden homebuilders and consumers in the United States.
Council president Kurt Niquidet says it is deeply disappointing that the U.S. continues to impose such trade protection measures.
That said, the dispute between Canada and the United States over softwood lumber prices extends beyond Trump.
Softwood is the term used for board products made of conifer trees, such as spruce and pine, which are generally more flexible than hardwood and are used in the construction of homes and buildings.
In Canada, the bulk of softwood exports goes to the United States, representing over half the market for the more than $10 billion industry, which is largely centred in B.C.
In Canada, lumber-producing provinces set so-called stumpage fees for timber harvested from Crown land, a system that U.S. producers — forced to pay market rates — consider an unfair subsidy.
The U.S. Department of Commerce has agreed and has imposed duties reflecting its belief that the Canadian product is being sold at less than fair value into the United States.
At times, long-term agreements have been reached between the two countries, most recently with the 2006 Softwood Lumber Agreement, which expired in 2015 and has not successfully been renegotiated.
Since then, new duties have been imposed under both Trump in his first term as U.S. president and Joe Biden, who has been in power during the most recent hikes.
Reviews are mixed in the United States. While the U.S. Lumber Coalition has welcomed "more lumber from American trees by American workers to build American homes," the National Association of Homebuilders has consistently argued that duties and tariffs on Canadian wood are negatively affecting the cost of housing in the United States.
That's of particular concern in California, where homebuilders, looking to recover from this year's massive wildfires, have warned they have few alternatives to imports from B.C. and any additional costs will ultimately be passed onto Americans trying to recover from the disaster.
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With files from the Canadian Press and Thompson Reuters