Canada challenges US softwood lumber tariffs under new NAFTA deal
The federal government is launching a challenge under the new NAFTA agreement against US tariffs on softwood lumber, said International Trade Minister Mary Ng.
Minister Mary Ng said the government reported the challenge under Chapter 10 of the Canada-United States-Mexico Agreement (CUSMA).
“Canada reaffirms its call on the United States to stop imposing unjustified duties on Canadian softwood lumber products,” Ng said in a statement.
The US Department of Commerce announced in November that it would impose an average tariff of 17.9 percent on softwood lumber imported from Canada; twice the previous rate of 8.99 percent.
In May, the U.S. government announced plans to raise the rate to 18.32 percent, but after further analysis over the summer, the agency decided to scale back that plan, while doubling the levy. .
The United States asserts that Canadian lumber producers are dumping their product into the United States at a lower price than US lumber companies because they are subsidized. The United States imposes a tariff on all softwood lumber in Canada to increase its retail price, which encourages consumers to purchase American lumber.
Canada has long rejected these claims, and various commercial courts on the issue have ruled in Canada’s favor.
“The rulings on this issue have always established that Canada is a fair trading partner, and Canada is confident that the rulings will continue to regard Canada as one,” Ng said in his statement.
Canada exports approximately $ 8 billion in lumber to the world each year, according to official government data. The United States is the biggest buyer.
Not all Canadian lumber will be subject to the same tariffs because the United States claims that different companies are subsidized at different levels. The final prices are as follows:
- Canfor Corp., 19.54 percent.
- West Fraser Timber Co., 11.12 percent.
- Resolute Forest Products Inc., 29.66 percent.
- JD Irving, 15 percent.
All other Canadian lumber producers will benefit from a base tariff of 17.9 percent.
This is the second time that Canada has invoked Chapter 10 of CUSMA. Last year, the government filed a similar challenge against the 8.99 percent tariff.
Chapter 10 allows one of the three countries to ask a binational trade panel to rule on a trade dispute, rather than turning to international bodies like the World Trade Organization (WTO).
Canada won a WTO softwood lumber case in August 2020, but the United States has appealed – and because Americans continue to block appointments to the WTO’s appeals body , this case has been blocked.