U.S. trade secretary Wilbur Ross confirmed an average 20 percent tariff would be imposed on Canadian softwood lumber which will impact $5 billion worth of softwood lumber imports from Canada. This represents 31.5 per cent of the total U.S. market.
Following Department of Commerce’s investigation, it has been preliminarily affirmed that imports of softwood lumber from Canada, are subsidized by the government. Based on these findings, Commerce calculated preliminary rates for countervailing duty assessments ranging from 3.02 percent to as high as 24.12 percent.
The Department of Commerce announcement signals the official implementation of the countervailing duty (CVD) and it is anticipated that antidumping duty (ADD) will average from 20 to 30 percent depending on the level of dumping.
For the CVD, a 90 day retroactive period to the effective date which is anticipated to be published in the Federal Register as April 24, 2017. Antidumping Duty Decision on Softwood Lumber Products from Canada has been “postponed” until Friday, June 23, 2017.
Jim Carr, Minister of Natural Resources, and Chrystia Freeland, Minister of Foreign Affairs, expressed their disappointment with the announcement.” This decision will negatively affect workers on both sides of the border, and will ultimately increase costs for American families who want to build or renovate homes,” the statement read. “The U.S. National Association of Home Builders has calculated that a $1,000 increase in the cost of a new house would put home ownership beyond the reach of more than 150,000 American families, and jeopardize thousands of jobs in the American home construction industry.”
The merchandise subject to this investigation is softwood lumber, siding, flooring and certain other coniferous wood (“softwood lumber products”). Softwood lumber product imports are generally entered under Chapter 44 of the Harmonized Tariff Schedule of the United States (“HTSUS”).
The scope includes:
- Coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding six millimeters.
- Coniferous wood siding, flooring, and other coniferous wood (other than moldings and dowel rods), including strips and friezes for parquet flooring, that is continuously shaped (including, but not limited to, tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded) along any of its edges, ends, or faces, whether or not planed, whether or not sanded, or whether or not end-jointed.
- Coniferous drilled and notched lumber and angle cut lumber.
- Coniferous lumber stacked on edge and fastened together with nails, whether or not with plywood sheathing.
- Components or parts of semi-finished or unassembled finished products made from subject merchandise that would otherwise meet the definition of the scope above.
We will provide further updates as they become available.
(Reference Globe and Mail – 4-24-2017 http://globalnews.ca/news/3399952/reality-check-does-canada-subsidize-softwood-lumber/)