Canadian Lumber Tariffs Cut By More Than Half
The National Association of Home Builders (NAHB) efforts calling on the Biden administration to eliminate — or at the very least reduce — duties on Canadian lumber shipments into the United States has taken a step in the right direction, according to the NAHB, with the Department of Commerce moving to cut tariffs by more than half and Canada seeking a new legal solution that would completely eliminate the tariffs.
The Department of Commerce has issued its final third administrative review to reduce duties on shipments of Canadian lumber into the United States by more than half from 17.99 percent to 8.59 percent. This is even lower than the initial third administrative review that would have set the tariffs at 11.64 percent.
The new 8.59 percent lumber tariff is expected to take effect later this month. Although lower tariffs could help to ease extreme price swings in the lumber market that have added $14,300 to the price of a typical new home since the early stages of the pandemic in the spring of 2020, the fact remains that the Commerce action does not adequately address the issues surrounding Canadian lumber — that all parties must come to the table to negotiate a long-term solution that puts an end to the tariffs.
That is the message that NAHB continues to send to the Biden administration. At the same time, NAHB supports Canada’s efforts to address legal issues surrounding these unfair tariffs. Canada reacted to the news out of the Commerce Department by requesting a dispute settlement through the U.S.-Mexico-Canada trade agreement (USMCA).
“Canada is disappointed that the United States continues to impose unwarranted and unfair duties on Canadian Softwood lumber,” said International Trade Minister Mary Ng. “While the duty rates will decrease from the current levels for the majority of exporters, the only truly fair outcome would be for the United States to cease applying baseless duties to Canadian Softwood lumber.
“These duties have caused unjustified harm to the Canadian industry and its workers,” Ng added. “They also amount to a tax on U.S. consumers, exacerbating housing unaffordability at a time of increased supply challenges and inflationary pressures.”
Ng said that Canada intends to challenge the final results of the third administrative reviews, including through launching a dispute settlement process under Chapter 10 of the USMCA.