U.S. Tariff Put on Lumber From Canada
Copyright 2001 The New York Times
August 10, 2001
By BERNARD SIMON
TORONTO, Aug. 10 — Siding with American sawmills, which complained that Canadian lumber producers benefited unfairly from government subsidies, the United States imposed a 19.3 percent tariff on Canadian softwood lumber today.
The new tariff was hailed by the American lumber industry, but was condemned by homebuilders and consumer groups who say it will lead to higher prices.
Canadian lumber exporters responded angrily. David Emerson, chief executive of the Canfor Corporation (news/quote) of Vancouver, British Columbia, one of the biggest producers, called the tariff "a punitive, arbitrary and purely protectionist measure." He called on the Canadian government in Ottawa to take a more aggressive stance on the issue.
At the heart of the dispute are the "stumpage fees" that forest-products companies pay to Canada's provincial governments for the right to log vast tracts of government-owned forest. American lumber companies say these fees are set artificially low, amounting to a subsidy.
About a third of America's lumber supply, or $16 billion worth, now comes from Canada, mainly from British Columbia. Canadian government figures show that shipments rose 11.3 percent in the second quarter, compared with the period in 2000, after a five-year bilateral agreement on lumber expired in March. Under the agreement, British Columbia had raised its stumpage fees by 15 percent.
The United States Commerce Department said in announcing the tariff that it had preliminarily determined that Canadian imports had grown to the point that they posed a threat to domestic lumber mills. A final determination will not be made until January; in the meantime, Canadian exporters will be required to post a bond equal to the duty that would be owed before their shipments may cross the border.
Beyond the tariff, the United States is considering a claim that Canadian lumber is "dumped" in the United States at prices below the cost of production. A ruling on that complaint is scheduled for release Sept. 24.
Rusty Wood, chairman of the Coalition for Fair Lumber Imports, the American trade group that pressed Washington to impose the tariff, said, "With this ruling, there can be no remaining doubts that Canadian lumber mills, subsidized by their government, benefit from pricing policies which hurt our U.S. producers and workers." The coalition had requested much higher tariffs than the government imposed.
Susan Petniunas, spokeswoman for a group of 15 retail, consumer and homebuilding groups in the United States, said she had hoped the Commerce Department would give more weight to consumers' interests than to "a small number of protectionist companies."