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Canada Confirms Challenge To US Lumber Duties

by Mike Godfrey, Tax-News.com, Washington

14 December 2017


Canada's Minister of Foreign Affairs, Chrystia Freeland, has confirmed the country will continue to challenge new duties introduced on Canadian lumber by the United States, which were confirmed on December 7 by the US International Trade Commission.

Dumping occurs when goods are sold into a foreign market at below the prevailing market rate in the exporter's domestic market. Countries can respond by levying taxes on imports to prevent unfair competition for their domestic producers, known as anti-dumping duties. To counteract unfair subsidies, countries may also introduce countervailing duties.

The completion of the ITC's investigation concluded the process needed to justify that the US anti-dumping duties and countervaiing duties are proportionate and lawful, with the Department of Commerce earlier concluding that Canadian lumber was being sold into the US market at less than fair value. The final cumulative tariff rate of the anti-dumping duties and countervailing duties will be about 20 percent for most producers.

Canada is the leading exporter of softwood lumber to the US, with exports to the US of USD5.8bn in 2016. Canadian exports satisfy about a third of US domestic demand of USD17.9bn.

Responding to the ITC's decision that the US should begin collecting the duties, Freeland said: "Canada's forest industry sustains good, middle-class jobs across our country, including in our rural and Indigenous communities. The Government of Canada will continue to vigorously defend our industry, workers, and communities against protectionist trade measures."

"As we have said throughout this dispute, punitive US countervailing and anti-dumping duties on Canadian softwood lumber are unwarranted and troubling. They are harmful to Canada and to lumber consumers in the United States."

"In recent weeks, Canada has begun legal challenges against the US duties on Canadian softwood under the North America Free Trade Agreement and before the World Trade Organization. We will continue to consult with the provinces, the territories, and Canadian industry and workers on a durable solution to this vital issue."

TAGS: tax | law | anti-dumping | Canada | United States | trade | North America

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