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US Excludes Canada's Atlantic Provinces From Lumber Subsidy Probe

28 June 2017, 01:57 | Kristen Gross

US applies second wave of duties against Canadian softwood lumber

Canadian lumber producers brace for second round of softwood lumber duties

Late Monday, the U.S. Department of Commerce ruled Canadian softwood producers were dumping lumber into the United States at prices lower than market value in Canada and added another 6.87 per cent in import duties to most Canadian softwood.

In April, President Donald Trump began collecting duties of between 3 and 24 percent on Canadian lumber exports, retroactive for three months, after the Commerce Department determined in a preliminary investigation that forest products had been unfairly subsidized by Canada's government.

The Commerce Department said that the duties announced Monday were "preliminary" and that it would reach a final determination on September 7.

The Trump administration has accused Canada of unfairly selling its lumber in the USA below production costs, aided in part by improper government subsidies - a trade practice known as "dumping".

While US Secretary of Commerce Wilbur Ross said he was "optimistic that we will be able to reach a negotiated solution on softwood lumber", the measures were part of an effort to "stand up for American companies and their workers".

The duties will continue to be collected until a final decision by the U.S.is issued later this summer.

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This is the fifth time the USA has accused Canada of unfairly subsidizing its softwood industry. Carr and Freeland also said they would welcome a U.S. Department of Commerce commitment to consider an exclusion for New Brunswick.

US producers asked the Commerce Department to investigate subsidies to Canadian competitors soon after President Donald Trump's election last November, alleging a dumping margin of 20.12% to 53.08%. The duties imposed "are based on a flawed rationale that is damaging to workers, communities and consumers in Canada and the U.S".

Tariffs the USA government implemented in late April on Canadian softwood lumber haven't had a jarring impact on lumber prices in the U.S.so far, according to some American lumberyard owners.

Canadian imports are essential for homebuilding as domestic producers are restricted by U.S. Forestry Service rules and Mr Granger says that red tape should be cut to allow greater production of American timber. Lumber futures in Chicago have jumped this year amid concerns that the trade battle will disrupt supplies. These actions hurt Canadian companies and Canadian workers, but they also hurt US homebuyers and the USA construction and renovation industry. The alternative is to be subject to US legal processes created to favour a few select timber barons.

The Canadian government hit back at the duties, promising to "vigorously defend Canada's softwood lumber industry, including through litigation" in a statement. She says the two countries should be working together to improve the industry, North America-wide.

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