As the Softwood Lumber Dispute V file winds its way through the usual US domestic as well as international trade court tribunals, a preliminary ruling from the US Commerce Dept is bringing a sharp reduction in the duty rates paid on Canadian softwood lumber entering the US. Sources: Timberbiz, Madison Report
All companies named, as well as the group “all others” category — except Resolute Forest Products, will likely be paying much less on their wood sold into the US come August 2020.
The Commerce Dept will be releasing reasons for this ruling “within a few days”. In August will be the final ruling, and soon after the new, lower, duties would take effect.
Do Canadian companies receive back the amount over this preliminary ruling they have paid so far, since the lumber duty was put in place? Good question, that is just one of the many entanglements of a complicated trade file like softwood lumber. The other, something new, currently afoot is that the international tribunal for softwood lumber at the World Trade Organization is stymied since December 2019 due to refusal by the US to appoint new arbitrator judges. There are only three judges on that panel, it is supposed to be a minimum of five.
This arbitration was quite close to nearing conclusion in 3Q 2019, that’s one of the reasons it was allowed to go on with only four judges.
At last update it is unknown if the WTO will be continuing with the ongoing Canada-US softwood lumber arbitration in international trade court.
In week ending January 31, 2020, benchmark North American construction framing lumber item Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) prices popped up by +$6, or +1.5%, compared with the previous week, to US$408 mfbm.
This week’s price is +$10, or +2.5%, more than it was one month ago. At this time last year this price was falling, so is now only up by +$4, or +1% compared with the end of January 2019, a significant drop from recent trend.
On February 3, 2020, the U.S. Department of Commerce released its preliminary determination for the First Administrative Review (AR1) in antidumping duty (AD) and countervailing duty (CVD) investigations of imports of certain softwood lumber products from Canada.
The final determination by the US Commerce Dept on Canada’s softwood lumber duty rate will be in August. At that time duty rates could be lowered to:
- 08% from 23.56% for West Fraser
- 63% from 20.52% at Canfor
- 84% from 17.90% at Resolute Forest Products
- 32% from 9.38% at J.D. Irving
- 21% for “all others”.
