The U.S. Department of Commerce (DOC) has ruled in favor of U.S. softwood lumber industry in its preliminary countervailing duty (CVD) investigation against Canadian softwood lumber imports. DOC has determined that Canadian producers are receiving subsidies ranging from 3.02% to 24.12%.
CVD have been assessed for Canadian softwood lumber, siding, flooring, unassembled pallet kits, notched lumber, pallet and packaging components and certain other coniferous wood products. A final decision on the CVD is expected on September 7, 2017. The U.S. government may also asses anti-dumping duties as well.
DOC calculated preliminary subsidy rates for five mandatory respondents: for Canfor Corporation, 20.26%; for J.D. Irving, Limited, 3.02%; for Resolute FP Canada, Ltd., 12.82%; for Tolko Marketing and Sales Ltd. and Tolko Industries Ltd., 19.50%; and, for West Fraser Mills, Ltd., 24.12%. Commerce established a preliminary subsidy rate of 19.88% for all other producers/exporters in Canada. The 19.88% rate will be assessed on many Canadian shipments, but this rate is less than what some predicted when forecasts suggested the rate could be 30% or higher.
Critical circumstances were determined for J.D. Irving Ltd and the all others rate, which means that retroactive duties will be assessed going back 90 days from the date the order is published in the Federal Register. Others will not be required to pay retroactive duties.
Duties will be collected by the U.S. Customs and Border Protection (CBP), and it will require cash deposits based on these preliminary rates. In 2016, imports of softwood lumber from Canada were valued at an estimated $5.66 billion.
CVD are assessed when the DOC determines that a foreign government provides a subsidy that benefits the production of goods from foreign. Canadian officials have requested that some provinces be excluded from any duties suggesting that they have market dynamics similar to what takes place in the United States. A spokesperson for the DOC said that the initial duties apply equally to all provinces, and that no decision has been made yet as to differences between the provinces.
The Pallet Profile published a special report in March as the threat of duties caused significant impacts on softwood pricing, especially in the West. The Pallet Profile will continue to monitor the issue and provide in-depth reporting. This information is critical as you communicate to your pallet customers what is going on in the market. The Profile is one of your best ways to stand informed. Call today 800-805-0263 to find out how you can subscribe.
