U.S. Commerce Secretary Wilbur Ross announced that the agency will impose new anti-subsidy duties averaging 20% on Canadian softwood lumber imports, Reuters reported.
This decision escalates the dispute and the duties will affect $5 billion worth of softwood lumber imports from Canada, according to Reuters.
"It's about 31.5 percent of the total U.S. market, so it's a pretty big deal in terms of the Canadian relationship," Ross said.
As Reuters reported, the trade case was filed at Commerce against Canadian lumber producers by their U.S. competitors, who argued that Canadian timber grown on public lands receives an effective subsidy from the government that is unavailable to the U.S. firms, who cut timber grown largely on private land.
Reportedly, the highest duty will be paid by West Fraser Mills (24.12%), followed by Canfor Corp at 20.26%. Moreover, Resolute FP Canada Ltd will pay a 12.82% duty, while Tolko Marketing and Sales and Tolko Industries will pay a 19.50% duty and J.D. Irving Ltd, will pay 3.02%. All the other Canadian producers face a 19.88% duty.
As Reuters reported, the preliminary determination directs U.S. Customs and Border Protection to require cash deposits for the duties on all new imports as well as softwood products imported over the past 90 days.
To take effect, the duties now need to be finalized by Commerce and then confirmed by the U.S. International Trade Commission after an investigation that includes testimony both from Canada and the US.