The U.S. Department of Commerce issued its final finding Thursday on the softwood lumber duties Canadian producers will pay, escalating a trade dispute amid the renegotiation of the North American Free Trade Agreement.
The department said most Canadian producers will pay a combined countervailing and anti-dumping rate of 20.83 percent, down from 26.75 percent in the preliminary determinations issued earlier this year.
Commerce Secretary Wilbur Ross said the decision “defends American workers and businesses from unfair trade practices.”
Canadian exporters sell softwood lumber at less than fair value and Canada provides unfair subsidies to producers, the department also said.
Canadian Foreign Minister Chrystia Freeland called the duties “unfair, unwarranted and deeply troubling,” saying they harm workers in Canada.
“We urge the U.S. Administration to rescind these duties,” Freeland said in a statement. “These duties are a tax on American middle class families too, whose homes, renovations and repairs will only be more expensive.”
Canada might take legal action through dispute settlement mechanisms under the North American Free Trade Agreement and the World Trade Organization, but Freeland said officials continue to engage their American counterparts about a negotiated settlement. A 2006 softwood-lumber agreement expired in 2015.
The U.S. Lumber Coalition said they are pleased with the duties because it means the U.S. lumber industry “can compete on a level playing field.”
The U.S. and Canada typically enjoy a friendly trade relationship, but things have soured this year as U.S. President Donald Trump has demanded big changes to NAFTA, which is in its 23rd year.
There are growing doubts that it will survive through its 24th.
The Trump administration has threatened to withdraw from the agreement if it can’t get what it wants in a renegotiation. But its demands— which range from requiring that more auto production be made in the U.S. to having more government contracts in the NAFTA bloc go to U.S. companies — will likely be unacceptable to the U.S.′ two other NAFTA partners, Canada and Mexico.
Source: Associated Press