Canadian lumber shipment duties on US to drop substantially

Anti-dumping duties to drop to 11.64% from 17.91% after third US Department of Commerce review

Originally published by Fastmarkets Random Lengths

Though the change won’t take effect for about six months, the countervailing and anti-dumping duties on Canadian lumber shipments to the U.S. will drop from the current 17.91% to 11.64%.

The change is related to the third administrative review being conducted by the U.S. Department of Commerce, which covers the 2020 period of investigation. The preliminary review was released this week, but the amount of duties collected won’t change until the final review, which would be in six months if the case follows typical form.

The fact that the duties will be reduced isn’t a surprise since the third administrative review covers the 2020 period when lumber prices were historically high. Fastmarkets Random Lengths Framing Lumber Composite Price averaged $565 in 2020 compared to $356 in 2019. All other things being equal, higher lumber prices typically result in lower duty rates, and vice versa.

Among the individual companies investigated in the case, duty rates dropped for all except West Fraser, which saw its preliminary combined CVD/AD rate rise to 13.09% from the current 11.14% rate.

Wood products producer, Canfor saw the biggest drop, with its combined duty rate falling to 6.75% from the current 19.54%. Resolute Forest Product’s rate will fall to 20.24% from 29.66%, and J.D. Irving’s rate will fall to 7.09% from 15.05%. The “all-other” rate of 11.64% assessed to other Canadian shippers is the weighted average of those investigated.

“Trade law enforcement has resulted in dramatic growth of U.S. made lumber by mitigating the harmful effects of Canada’s subsidized and unfairly traded imports,” said Jason Brochu, chairman of the U.S. Lumber Coalition.Canada’s Minister of International Trade, Mary Ng, vowed to fight the ongoing duties. “The Government of Canada will continue to stand up for Canada’s forestry sector through all available avenues, including litigation under NAFTA and the Canada-United States-Mexico Agreement, and at the WTO.”

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