Canada starts appeal of US softwood lumber tariff decision

Canada starts appeal of US softwood lumber tariff decision
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The Canadian government on Wednesday said it has launched a legal challenge to hefty duties imposed by the United States on its softwood lumber industry.

Chrystia Freeland, Canada's minister of foreign affairs, said Ottawa is following through with an appeal of the U.S. International Trade Commission's (ITC) decision made in November to levy countervailing and anti-dumping duties on lumber imports. 

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“The Government of Canada will continue to vigorously defend our industry and its workers against protectionist trade practices,” Freeland said in a statement.

“U.S. duties on Canadian softwood lumber are unfair, unwarranted and troubling,” she said.

“They are harmful to Canada’s lumber producers, workers and communities and they add to the cost of home building, renovations and other projects for American middle-class families.”

Canada has won similar tariff fights in the past with the United States.

Freeland said Canadian government officials will continue to work within Canada toward a solution as well as with “the U.S. administration and with American legislators to come to a new agreement on softwood lumber.”

The Office of the U.S. Trade Representative tweeted that "we are completely confident" that the Commerce Department and the ITC "closely followed U.S. law and that their actions are consistent with our WTO obligations."

"We will of course defend this case and expect to prevail," USTR said.

With talks still ongoing on a final rework of the North American Free Trade Agreement (NAFTA), any lumber deal is expected to be settled separately.

The U.S. decision to slap tariffs on Canada's lumber industry has roiled already tense NAFTA talks, which are set to continue Jan. 23-28 in Montreal.

The U.S. lumber industry as well as lawmakers on Capitol Hill argue that Canada subsidizes and dumps lumber exports into the United States.

Joe Patton, co-chairman of the U.S. Lumber Coalition, called the duties " a fair enforcement of U.S. trade law," in a statement to The Hill.  

"For decades, the Canadian government has abused the law and provided massive subsidies to its lumber industry, harming U.S. producers and workers," Patton said. 

But the Canadian government has denied propping up the lumber industry to the detriment of U.S. businesses.

Canada also has filed a case at the World Trade Organization in response to the decision to ramp up tariffs.

The tariff averages 20.83 percent on Canadian lumber imports, which are used mostly for home building in the United States.

U.S. home builders disagree with the lumber industry over the softwood issue and have called the duties "a protectionist measure designed to safeguard the interests of major domestic lumber producers at the expense of American consumers."

The National Association of Home Builders estimates that the tariffs will increase the price of an average single-family home built in 2018 by $1,360.

More than 95 percent of all imported lumber came from Canada last year.

In 2016, imports of softwood lumber from Canada were valued at an estimated $5.66 billion.

This story was updated at 5:50 p.m.