The Trump administration Thursday slapped punitive duties on Canadian softwood lumber, finalizing a determination that the imports were unfairly subsidized and dumped into the U.S. market.
The move, part of get-tough trade policies under President Trump, addressed a long-running dispute over softwood lumber but also escalated the friction between the two countries amid renegotiation of the North American Free Trade Agreement.
“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” Commerce Secretary Wilbur Ross said in announcing the decision.
“This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices,” Mr. Ross said.
The anti-dumping and anti-subsidy duties affect about $5.66 billion worth of imports of softwood lumber, a key building material. The department said exporters from Canada have sold softwood lumber in the U.S. market at 3.20 percent to 8.89 percent less than fair-market value, and that Canada is providing unfair subsidies at rates of 3.34 percent to 18.19 percent.
Canadian officials called the punitive duties “unfair, unwarranted and deeply troubling.”
“We urge the U.S. Administration to rescind these duties, which harm workers and communities in Canada. These duties are a tax on American middle class families too, whose homes, renovations and repairs will only be more expensive,” according to a joint statement from Foreign Minister Chrystia Freeland and Natural Resources Minister Jim Carr.
They threatened to challenge the action take under NAFTA rules and with the World Trade Organization, adding, “We will forcefully defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past.”
The Trump administration has been stepping up action against trade practices it deems unfair.
From Jan. 20 through Nov. 1, Commerce has initiated 77 anti-dumping and countervailing duty investigations, a 61 percent increase from 48 in the previous year.
The duties imposed on softwood lumber must still be approved by the U.S. International Trade Commission. A final determination is expected by Dec. 18.