Commerce Department Adjusts Import Taxes On Canadian Lumber

Nov 3, 2017

The Trump administration has issued the latest blow in a trade war between the United States and Canada. The fight is over lumber and while it could save timber jobs in Montana, it's also creating a lot of uncertainty in Canada.

At a hearing last month, Republican Senator Steve Daines lamented the loss of timber jobs in Montana.

"When I was a kid growing up in Montana we had 30 active sawmills. Today we’re down to eight."

For years, American lumber producers have blamed that decline in part on their Canadian counterparts who they accuse of selling lumber here in the U.S. at unfairly low prices.

So on Thursday, the U.S. Department of Commerce slapped an almost 21 percent import tax on most Canadian softwood lumber coming across the border.

Daines has pushed these import taxes since 2015, and in a statement he says it will help save Montana jobs.

"Today’s announcement is putting America first and protecting the hardworking families who rely on these good paying lumber jobs. We’re leveling the playing field so that the Canadians have to play by the same set of rules that Montanans do."

The import taxes are the latest blow in a timber war that stretches back to 2015, when a trade agreement between the two countries expired.

The Commerce Department says Canadian producers began selling their lumber at less than fair value. So in April, the Commerce Department levied a preliminary, import tax of nearly 27 percent. After reviewing information, however, revised that number to around 21 percent in a final decision Thursday.

For the past six months, Canada’s timber industry has weathered these duties.

"The demand in the U.S. is strong enough to keep pulling that lumber in," says Harry Nelson, a forestry professor at the University of British Columbia.

Lumber prices are high, offsetting any losses from the import tax. But if the housing market slumps, or the Canadian dollar strengthens, it could mean trouble for our neighbors to the north, especially in smaller mills.

"The larger producers they can kind of swallow that, right? It’s the smaller ones and especially the smaller ones that are kind of struggling with log supply that will be disproportionately affected," Nelson says.

While no mills have yet closed because of the duties in western Canada, eastern Canada has seen some layoffs and shutterings.