Canada challenges US softwood duties

Canada has filed for a judicial review of last month's US Commerce Department decision to extend import duties on Canadian softwood lumber tariffs, a nearly 8% fee charged by the US government on imports from Canadian sawmills.

American home builders import about $8 billion worth of Canadian lumber a year. But American lumber producers resent what they see as unfair competition from Canada – they say Ottawa unfairly subsidizes the lumber sector because much of the land is owned by the Canadian government, which charges stumpage fees to lumber producers. In turn, the US producers, most of whom produce on private land, have convinced Washington to impose the duties (and have done so for decades).

The two sides remain at a standoff: Trade Minister Mary Ng said the American duties are “unfair, unjust, and illegal,” while the U.S. Trade Representative's office called for Canada to “address the underlying issues related to subsidization and fair competition.”

The two countries reached an agreement on the matter in 2006, but it expired in 2015, after which the Americans imposed duties that Canada has been challenging ever since – and Canada’s softwood producers reportedly paid more than $8 billion in lumber duties to the U.S. between 2017 and 2022.

Canadian industry leaders urged Trudeau’s government to make a deal with Joe Biden when he traveled to Ottawa in March, but the Canadian side signaled before the meeting that no deal was expected. Since Biden needs to wrangle votes on Capitol Hill from politicians whose constituents are threatened by the Canadian competition, his hands will likely remain tied.