The US is to impose further punitive tariffs on imports of softwood lumber from Canada, escalating a long-standing trade dispute that has already led to higher timber prices.
Preliminary anti-dumping duties of as much as 7.7 percent are to be levied on Canadian producers, the US Department of Commerce said in a statement on Monday.
The move follows the US government’s decision in April to slap countervailing tariffs of up to 24.1 percent on shipments from Canadian companies including West Fraser Timber Co and Canfor Corp.
Until Canada and the US reach a negotiated solution on softwood lumber, the nation will continue to “vigorously apply” the anti-dumping and countervailing duties to “stand up for American companies and their workers,” US Secretary of Commerce Wilbur Ross said in a statement.
The trade spat, which has been going on intermittently for decades, was reignited in November last year when the US lumber industry filed a petition asking for duties.
The group alleges that Canadian wood is heavily subsidized and imports are harming US mills and workers.
Since then, trade between the two countries has become an increasingly fraught issue, with US President Donald Trump seeking to renegotiate the North American Free Trade Agreement.
The tariffs turned out to be less severe than some analysts had predicted.
The department on Monday said in a preliminary determination that it has calculated that Canfor is selling products in the US at 7.72 percent less than fair value, Resolute FP Canada at 4.59 percent, Tolko Industries Ltd at 7.53 percent and West Fraser at 6.76 percent.
It set a preliminary dumping rate of 6.87 percent for all other producers in Canada.
Canada is the world’s largest softwood lumber exporter and the US is its biggest market.
Lumber futures in Chicago have jumped this year amid concerns that the trade battle will disrupt supplies.
While the additional duties are on the “lower end of the range” the industry was expecting, no tariffs are warranted, British Columbia Lumber Trade Council president Susan Yurkovich said.
Protectionist duties hurt Canadian companies and communities, and also hurt US consumers who choose to build, buy or renovate a new home, she said.
“We find it incredibly frustrating the US industry continues to use litigation as a means to enhance their position and benefit from price volatility that their trade actions create,” Yurkovich said during a conference call with reporters.
The department made a preliminary ruling earlier on Monday that the Atlantic provinces of Newfoundland and Labrador, Prince Edward Island and Nova Scotia are to be excluded from the punitive tariffs.
A final decision is expected by late summer.
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