Halfway Commerce Measure to Cut Canada Timber Duties
In a positive development for housing affordability and consumers, the U.S. Commerce Department has decided to cut duties on Canadian softwood lumber imports, but it has fallen short in meeting its legal obligation to completely rescind the tariffs.
“Reducing overall duties from 20.2% to 10.8% is only a halfway measure,” said NAHB President David Wilson.
Wilson said that the Administration should eliminate all border taxes on lumber and refund to Canada the more than $4 billion in duties that have been collected, as has been stipulated by binational appeals panels.
There are not enough trees available for harvesting in the U.S. to fill the demand for lumber to build American homes. Canadian imports account for more than one-third of the entire lumber supply used in U.S. home building and are essential for meeting domestic housing demand.
Expected to take effect in about a week, the new countervailing duty will be 8.7%, down from 16.2%, and an anti-dumping tariff will decline from 4% to 2.1%.
U.S. law allows countervailing duties to be imposed only if a foreign supplier is benefiting from subsidies and U.S. producers are being injured, or threatened with injury, as a result. Several rulings have found that neither of those requirements were met.
NAFTA panel decisions have unanimously determined that the Commerce Department’s finding of a Canadian lumber subsidy was based on flawed calculations. And separate binational review panels have ruled that there was no threat of injury from Canadian imports. Appellate decisions also have stipulated that the U.S. must refund the billions of dollars in duties that have been paid to date. NAFTA rulings carry the weight of law in Canada, the U.S. and Mexico, but the Administration has not implemented decisions that invalidate the lumber duties and return all duties paid out by Canadian firms.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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