Monday, November 28, 2016

Countervailing Duties May Push Up Prices for Softwood Construction Lumber

A November 25 petition by U. S. softwood lumber producers Weyerhaeuser and Potlatch, together with the Carpenters Industrial Council, seeks imposition of countervailing duties on Canadian softwood imported into the U. S. following expiration of the one year standstill agreement between Canadian and U. S. trade officials. The U. S. companies and the carpenter’s union assert that Canadian softwoods are being sold in the U. S. below cost. Canada’s BC Lumber Trade Council opposes the petition. Council President Susan Yukovich says, “The claims levelled by the U. S. lumber lobby are based on unsubstantiated arguments.”

Negotiations between the Obama administration and Canada’s Trudeau government have failed to produce a new bilateral trade agreement after a year of discussion. It seems unlikely that an incoming Trump administration, with its protectionist sentiments, would take any action to prevent softwood lumber price increases which will follow imposition of the countervailing duties proposed by U. S. lumber interests. Look for American housing and smaller commercial construction prices to go up as a result, in the near future.

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