Under the Trump administration, the US commerce department, under the guidance of Secretary Wilbur Ross continues to take a tough stance on countries that have used unfair means to promote exports.
The U.S. insists Canada is unfairly subsidizing softwood lumber producers because in Canada, tracts of timber are owned by the provincial governments, while in the United States, softwood lumber lots are privately owned.
The Canadian government has vowed to defend the domestic lumber industry against protectionist measures. Canadian wood prices grew by the amount of the tax, and US lumber producers raised their prices as well. "A reliable source of softwood lumber products from B.C. and Canada will benefit the US housing industry and American home-buyers". "This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practises".
The United States and Canada have been working on a long-term deal to manage the softwood lumber trade, a prolonged prickly trade issue between the two economic partners.
"The U.S. Department of Commerce's decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted and deeply troubling", said a joint release issued by Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr.
US Customs and Border Protection will now be required to collect cash deposits from importers of softwood lumber from Canada, based on the final rates.
"In the absence of such a solution, Canada must state unequivocally that it will use every avenue possible - including legal action through NAFTA and the World Trade Organization - to overturn these duties which are without merit", he said. While the tariffs aren't as bad as they were before, they still "represent a burden on forestry workers and communities right across the country", he said.
"The U.S. continues to attack its closest friend, neighbour and ally while domestically the U.S. lumber coalition continues to put the interest of its members ahead of what is good for the American economy and American consumers", said Bruce Ralston, Minister of Jobs, Trade and Technology. "It shows the Commerce Department agrees with what we the lumber producers have been trying to tell them, that there was an export violation, and their government does subsidize their industry". Canada also is providing unfair subsidies to its producers at rates from 3.34 percent to 18.19 percent.
Granger MacDonald, chairman of the National Association of Home Builders, said the softwood tariffs come as home builders and homeowners are rebuilding in the aftermath of hurricanes and California wildfire.
US and Canadian officials have been working for months with industry representatives to come to an agreement to avoid the tariffs announced Thursday, which if permanently imposed will add a duty of around 20% or more, depending on the Canadian mill.
Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, denied that the American industry was the barrier to a deal.
USA customers bought about $5.6 billion worth of Canadian lumber in 2016.