Lumber Trade Update 7.6.23
A message from the U.S. Lumber Coalition
6 billion dollars have been collected on Canadian softwood lumber imports at the border so far as a result of the trade case brought by the Coalition in late 2016. When filing the trade cases the cooperation and support of the U.S. industry was critical to provide the evidence that unlawfully subsidized and dumped softwood lumber from Canada caused injury to the U.S. industry. Because of those efforts, the U.S. government imposed antidumping and countervailing duties on Canadian softwood lumber imports to provide the U.S. industry a level playing field.
Canada’s share of the U.S. market was 31.8% in 2016. Most recent data shows Canada’s share at 23%. In the past five years, while the antidumping and countervailing duty orders were in force and maintained by the work of the Coalition, the U.S. industry has been able to increase production, made critical capital investments, and increase employment. The trade relief provided by the antidumping and countervailing duties means that Canadian exporters can’t just drop prices to win sales without repercussions.
If the duties on Canadian lumber imports go away, so does this protection. I think we all understand what will happen to our businesses if we go back to how things were before the trade cases were instituted. In fact, the Department of Commerce has determined that if the orders are revoked, Canadian dumping and subsidization would occur at a level equivalent to a duty rate of 26.9 percent.
This is why we must all participate in the sunset review by submitting a questionnaire response, so that the U.S. government can have the full picture of the industry to make an affirmative determination that revoking the trade cases will lead to a recurrence of harm to the domestic industry from Canadian imports.
Under U.S. trade laws, on a five-year cycle, our industry has to demonstrate to the United States International Trade Commission (“ITC”), that these duties are still necessary to ensure the domestic industry is able to compete fairly.
In a sunset review, we need to demonstrate that the return of unfairly-traded Canadian imports to the U.S. market would harm our industry. The ITC makes its determination through an up or down vote. Up and the duties continue for five more years; down and the duties terminate. To be clear, if the Coalition fails to win the sunset review due to lack of industry support, all trade protection goes away and the border is open to the unrestricted flow of Canadian lumber products.
As part of the review process, the ITC will be sending out a detailed questionnaire to U.S. producers regarding various aspects of their operations, in order to assess the current state of the industry and determine whether the revocation of the antidumping and countervailing duty orders will lead to a recurrence of harm to the domestic industry. The ITC will issue the questionnaire on June 29, 2023, and the deadline for the completion of the questionnaire responses is July 27, 2023.
In order to prevail on the sunset review, it is important for us, as U.S. producers, to respond to the ITC’s questionnaire to provide the agency an accurate picture of the state of the industry. Given the complexity of the questionnaire, the Coalition’s law firm, Picard Kentz & Rowe LLP, stands ready to assist each and every one of you to fill out the questionnaire.
The law firm has arranged the following Webinar and Q&A sessions to guide you through how to respond to the questionnaire:
- July 12, 11am ET, https://bit.ly/43xav2k
- July 13, 2pm ET, https://bit.ly/3p236Jt
- July 19, 2pm ET, https://bit.ly/43PbScq
Please kindly review the questionnaire before the webinar and mark any questions for which you would like further explanation. It might be useful to have your CFO and/or a member of the sales team join the call if there are questions about those sections of the questionnaire.
If you cannot attend any of the Webinars listed above, or if you still have questions after attending the Webinar, please feel free to reach out to the law firm for further assistance.
When you receive the questionnaire, you will notice that the information requested in the questionnaire is sensitive business data. I want to assure you that the information you provide to the ITC (or the Coalition’s law firm) will not be shared with any Coalition members, other companies, or with the Coalition’s staff. The only people that will have access to the confidential business information will be individuals authorized to review such information under an administrative protective order (“APO”). No companies or industry trade associations are allowed to be on the APO; only their legal teams and government officials are permitted access. APOs prohibit the public release of business confidential information, and provide for sanctions should its terms be violated.
Thank you for your time and consideration. Please join me in telling the ITC that the trade cases matter to our industry and need to remain in place.
Chairman, U.S. Lumber Coalition
CEO, Stimson Lumber Company