U.S. appears to lower Canadian softwood lumber tariffs — but uncertainty remains

British Columbia’s wood manufacturing sector says Canada’s softwood lumber dispute mechanism with the United States is a “broken process.”

The complaint by the Independent Wood Processors Association comes after the U.S. Department of Commerce posted its preliminary tariff determination for the sector, estimated at just short of 25 per cent, lower than the current duty rate of more than 35 per cent.

The association said Friday that while it appears tariffs may be lowered, it cautions that there is still uncertainty on whether the final rate — expected in August — will actually represent a reduction of the current duty.

Executive director Brian Menzies said in a statement that wood manufacturers are being unfairly punished, since companies do not hold timber tenures, harvest Crown timber or receive subsidies — and should not be included in the dispute.

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B.C. Forests Minister Ravi Parmar said the province is disappointed the United States has “signalled that it will continue to impose unwarranted and unfair duties on Canadian softwood lumber products.”

“These duties serve only to damage both of our economies by harming B.C. and Canadian communities, and increasing the cost of housing and renovations for American families,” he said.

B.C.’s lumber industry has taken major hits over the last few years, as escalating U.S. duties on softwood lumber imports have piled atop challenges like a major beetle infestation and wildfires, leading to thousands of jobs lost.

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Premier David Eby said before speaking at the Council of Forest Industries Convention in Vancouver on Friday that the forests industry has more of an impact on Canada’s GDP than steel and auto parts and that the sector should be prioritized in negotiations with the United States.

“There’s $8 billion in a tariff bank account that is jointly held between Canada and the United States that could go to grow the sector,” he said.

“[It] could go support forest manufacturers on both sides of the border, all of whom are struggling right now, partly due to trade policy, partly due low lumber prices.”

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The wood processors said an existing dispute-resolution process included in the Canada-United States-Mexico Agreement, also known as CUSMA, has not yielded “meaningful progress.”

It said the Canadian and U.S. governments need to “prioritize direct negotiations,” instead of repeating the “cycle of endless litigation,” noting that consumers as well as workers and businesses on both sides of the border are being penalized with uncertainty and higher prices. 

“After nearly a decade, it is obvious the current dispute mechanisms are not working,” Menzies said. “If legal channels cannot solve this, then political leaders need to step in and negotiate a real solution.”

“If the U.S. industry has real concerns, then let’s hear them,” he said. “Enough hiding behind paperwork, bureaucracy, and endless administrative rulings.”