On Aug. 22, Canadian Trade Minister Mary Ng said Canada will challenge the extension of U.S. import duties on Canadian softwood lumber products, according to Reuters.
The softwood lumber tariffs are the legacy of a long trade dispute regarding the structure of Canada’s timber sector that could not be resolved when a quota agreement expired in 2015. U.S. producers say Canada unfairly subsidizes its lumber sector.
In July, the U.S. Commerce Department set a duty rate of 7.99% on softwood lumber products.
On Aug. 21, Canada filed notices of intent to begin judicial review of those duties, which Ottawa described as “unfair, unjust and illegal.” Ng said Ottawa is willing to discuss a negotiated outcome with Washington, D.C. The ministry has routinely filed challenges under the rules of the U.S.-Mexico-Canada Agreement on trade.
The U.S. has based its tariffs on a finding that Canadian timber harvested from federal and provincial lands with low government-set stumpage fees constitutes an unfair subsidy, while most U.S. timber is harvested from private land at market rates.
“We are prepared to discuss another softwood lumber agreement when Canada is ready to address the underlying issues related to subsidization and fair competition so that Canadian lumber imports do not injure the U.S. industry,” said a spokesperson from the Office of the United States Trade Representative in a statement.
