Canada to challenge U.S. softwood lumber duties under Canada-United States-Mexico Agreement

August 29, 2022 – Ottawa, Ontario – Global Affairs Canada

The Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, today issued the following statement regarding the United States’ unwarranted and unfair duties on softwood lumber from Canada:

“Today, Canada filed notice that it will challenge, under Chapter 10 of the Canada-United States-Mexico Agreement (CUSMA), the final results of the U.S. Department of Commerce’s third administrative reviews of its anti-dumping and countervailing duty orders on softwood lumber from Canada.

“Canada is disappointed that the United States continues to impose unwarranted and unfair duties on softwood lumber from Canada. The only fair outcome would be for the United States to meet its CUSMA obligations and cease applying unjustified duties on all Canadian softwood lumber products.

“The United States has long relied on competitive Canadian lumber products to meet its domestic needs for high-quality, sustainable and innovative building materials. These unjustified duties on softwood products from Canada not only harm Canadian communities, businesses, and workers, but they amount to a tax on U.S. consumers, affecting housing affordability at a time of supply challenges and inflationary pressures.

“Canada will always defend its softwood lumber industry, the workers, and the communities it supports. Taking legal action under CUSMA represents another step in Canada’s ongoing defence of its forestry sector.

“Canada’s softwood lumber industry is a key driver of economic activity across our country and an essential component of Canada’s forestry sector, which contributed more than $34.8 billion to the country’s GDP in 2021 and employs some 205,000 workers.

 “Our government has been consistent in expressing a willingness to work with the United States toward a negotiated solution to this long-standing trade issue that would allow a return to predictable cross-border trade in softwood lumber.”

Quick facts

• Canada’s decision to pursue these challenges under Chapter 10 of CUSMA was made in consultation with affected provinces, territories and industry leaders.
• As part of the challenge to U.S. softwood lumber duties under CUSMA, binational panels will be established and tasked with determining whether the duty rates in question were reached in a manner consistent with U.S. law.
• The U.S. Department of Commerce conducts an annual review of its anti-dumping and countervailing duty orders. Each annual U.S. administrative review establishes duty assessment rates for shipments entered during a specific period and the new duty deposit rate going forward until the next administrative review.
• On August 4, 2022, the U.S. Department of Commerce issued the final results of the third administrative reviews of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada.
• The new combined “all others” rate that will apply to exports from companies that are subject to the third administrative reviews is 8.59%; the previous “all others” rate for most companies was 17.91%. 
• Following the completion of any legal challenges under CUSMA’s Chapter 10 or in U.S. courts, these new anti-dumping and countervailing duty rates will apply retroactively to softwood lumber exports to the United States from companies that were subject to the third administrative reviews.

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