Canada’s federal government in Ottawa has announced its intention to challenge an extension of U.S. import duties levied on Canadian softwood lumber products.
Canada’s trade ministry has called the duties placed on softwood lumber “unfair, unjust and illegal.”
The softwood lumber tariffs are the result of a decades-long trade dispute between Canada and the U.S. over the structure of Canada's timber sector that could not be resolved when a quota agreement expired in 2015.
U.S. producers say Canada unfairly subsidizes its lumber sector, and the U.S. Commerce Department this July set a duty rate of 7.99% on imported products.
Canada’s federal government has now filed an official notice of its intention to commence a judicial review of those duties.
However, officials in Ottawa say they are also willing to discuss a negotiated outcome with their counterparts in Washington. D.C.
U.S. government officials say they based the latest tariff on a finding that Canadian timber harvested from federal and provincial lands with low stumpage fees constitutes an unfair subsidy.
Most U.S. timber is harvested from private lands at market rates, say American officials.
When imposing the duty of 7.99%, the U.S. Trade Representative's office said it was trying to ensure a level playing field for American lumber producers.
Canada’s challenge of the U.S. duties is likely to be heard by a dispute resolution panel set-up under the U.S.-Mexico-Canada Agreement on trade.
