Canada condemns US decision to almost double softwood lumber tariff
Canada is criticizing the U.S. Department of Commerce for nearly doubling the duties it imposes on softwood lumber, saying the decision is both “unfair” and “unwarranted.”
International trade minister Mary Ng says the U.S. has increased the duties on Canadian softwood lumber from 8.05 percent to 14.54 percent—a nearly 6.5 percent increase.
“We will always fight for the best interest of Canadians and continue to use all available avenues to vigorously defend the workers, businesses, and communities who rely on softwood lumber for their livelihoods.”
British Columbia Minister of Forests Bruce Ralston said he is “disappointed” by the move.
Ng and Ralston both said legal action under the North American Free Trade Agreement and the Canada-United States-Mexico Agreement could be a next step if the long-standing dispute cannot be resolved.
If litigation were to move ahead, the case would be heard by the U.S. Court of International Trade and at the World Trade Organization, Ng said.
The Department of Commerce uses the U.S. Tariff Act to determine if goods are being sold at less than fair value or if they’re benefiting from subsidies provided by foreign governments.
Canadian provinces that produce lumber establish stumpage fees for timber harvested from Crown land. This system has largely been viewed as unfair by U.S. producers, who are required to pay market rates.
“The United States is open to resolving our differences with Canada over softwood lumber to ensure a level playing field for U.S. industry,” Cohen said.
“U.S. trade officials have communicated to Canada our commitment to reaching an agreement if Canada addresses underlying policy issues related to subsidization and fair competition.”
It’s a practice that distorts the U.S. softwood lumber market and negatively impacts the country’s sawmills and communities, the group said.
“The United States does not need the unfairly traded Canadian lumber imports to supply current levels of home construction,” U.S. Lumber Coalition chairman Andrew Miller said in the statement. “What American mills, workers, and timberland holders need is the continued strong enforcement of the U.S. trade laws [to] help facilitate a level playing field.”
Digital Services Tax
The Computer and Communications Industry Association, which represents many big tech companies including Amazon, Apple and Uber, have called on U.S. President Joe Biden’s administration to take formal steps against the tax under the U.S.-Mexico-Canada Free Trade Agreement.
Other countries have implemented similar tools to tax the profits of large multinational companies in the digital sector. Critics of the Canadian tax wanted Ottawa to put it on hold to give the Organisation for Economic Co-operation and Development (OECD) time to implement a global framework.
That framework has seen significant delays, however, particularly from the U.S. where moves to sign on to the agreement could remain stalled by the political realm of a divided Congress.
The Liberals maintained they have been clear with their southern neighbour that Canada would proceed with the tax if there was no movement on the global framework.
The Canadian Press contributed to this report.