Canada officially launches challenge on U.S. duties on softwood lumber


Source: CanGov/Fordaq

On Monday, August 29, Canada filed notice that it will challenge, under Chapter 10 of the Canada-United States-Mexico Agreement (CUSMA), the final results of the U.S. Department of Commerce’s third administrative reviews of its anti-dumping and countervailing duty orders on softwood lumber from Canada.

The intention to challenge the “unwarranted and unfair” duties was announced last month by Canada’s Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng.

“Canada is disappointed that the United States continues to impose unwarranted and unfair duties on softwood lumber from Canada. The only fair outcome would be for the United States to meet its CUSMA obligations and cease applying unjustified duties on all Canadian softwood lumber products,” the minister said in a statement.

She added that the U.S. has long relied on competitive Canadian lumber products to meet its domestic needs for high-quality, sustainable and innovative building materials.

“These unjustified duties on softwood products from Canada not only harm Canadian communities, businesses, and workers, but they amount to a tax on U.S. consumers, affecting housing affordability at a time of supply challenges and inflationary pressures,” Ng said.

On August 4, the U.S. Department of Commerce issued the final determination of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada. The new combined rate is 8.59 per cent, dropping from the previous rate of 17.91 per cent.

Canada’s decision to pursue these challenges under Chapter 10 of CUSMA was made in consultation with affected provinces, territories and industry leaders. As part of the challenge, binational panels will be established and tasked with determining whether the duty rates in question were reached in a manner consistent with U.S. law.

“Canada will always defend its softwood lumber industry, the workers, and the communities it supports. Taking legal action under CUSMA represents another step in Canada’s ongoing defence of its forestry sector,” said Ng. “Canada’s softwood lumber industry is a key driver of economic activity across our country and an essential component of Canada’s forestry sector, which contributed more than $34.8 billion to the country’s GDP in 2021 and employs some 205,000 workers.”

Ng said Canada is willing to work with the U.S. toward a negotiated solution to the long-standing trade dispute.

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