The U.S. Department of Commerce today announced that preliminary countervailing duties of nearly 20 per cent will be applied to the majority of Canadian softwood lumber shipments entering the United States.
Preliminary countervailing duties in the form of cash deposits become effective around May 1, 2017, (once notice published in U.S. federal register) for four months to the end of August. Thereafter, these duties will not be collected until the final orders are published in January 2018.
The U.S. Department of Commerce argues that the countervailing duty is required to offset what in its view is unfair subsidies that Canadian and provincial governments allegedly provide to lumber companies.
The U.S. Department of Commerce investigated five companies and assessed preliminary countervailing duties as follows:
- Canfor: 20.26 per cent
- Irving: 3.02 per cent
- Resolute: 12.82 per cent
- Tolko: 19.50 per cent
- West Fraser: 24.12 per cent
The preliminary countervailing duty assessed on all other companies is 19.88 per cent (the average of the duty rates assessed on the five companies). In addition on April 24, the U.S. Department of Commerce found “critical circumstances” applied on a preliminary basis to Irving and all other companies, but not to Canfor, Resolute, Tolko and West Fraser. This means that Irving and all other companies may be assessed countervailing duties on their shipments made since about Jan. 31 (90 days prior to the notice being published in the U.S. federal register, expected around May 1).
Cash deposits are held in trust by U.S. Customs until all avenues for appeal are exhausted. Options for appeal will be assessed at the time all final orders are issued, which is currently expected to be in January 2018.
On June 23, the U.S. Department of Commerce is expected to release its preliminary determination on anti-dumping duties. The Department of Commerce argues that an anti-dumping duty may be required to offset what in its view are unfair selling practices by Canadian lumber companies that are allegedly selling lumber into the U.S. at a price below their costs or sales value in Canada. Critical circumstances also would apply to Irving and all other companies on a preliminary basis.