Key Takeaways:
- Lower US government tariffs may provide some relief to softwood producers in New Brunswick later this year.
- Most mills in New Brunswick will see their combined anti-dumping and countervailing duty rates drop from 17.9% to 11.64 percent.
- The United States discovered that as government-owned Crown land became more important in the wood supply, the price paid for private wood changed.
Lower duties from the US govt may provide some relief to New Brunswick softwood producers later this year.
The US Commerce Department’s preliminary assessment proposes lower amounts that would take effect later this year, just 2 months after verifying increases in duties.
The combined anti-dumping and countervailing duty rates for most mills in New Brunswick will drop from 17.9% to 11.64 %.
J.D. Irving Ltd.’s rate will be reduced from 15% to 7.09%.
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Because it persuaded the US Commerce Department to start investigating it individually from the rest of the industry, J.D. Irving’s wood charges a different rate than some other producers.
After concluding that rates on provincial wood were not centered on an open market, the US included New Brunswick mills in its softwood lumber tasks for the first time in 2017.
The United States discovered that the growing role of govt-owned Crown land in the wood supply altered the price paid for private wood.
That conclusion is still the official US position, as stated in the assessment released this week.
“We discovered that oligopsonistic conditions exist in New Brunswick, which contribute to market distortion for private origin standing timber in the province,” the report says.
An “oligopsony” is a market in which a small count of large buyers can significantly impact the price of a commodity.
American lumber manufacturers have long complained that governments subsidize Canadian wood unfairly, making it less expensive for American buyers.
Duties levied on American customers are intended to drive up the cost of Canadian wood and make the American product more competitive.
The duties are reviewed every year under US law, with a preliminary assessment made early in the year and a final decision in the fall. According to a report released this week, lower proposed duties will not be finalized until September.
The November rates were set using market data from 2019, whereas the preliminary forecast published this week used data from 2020.
Last fall, the Canadian govt declared that it would file a formal challenge to the duties imposed under the Canada-United States-Mexico free trade agreement.
Source: CBC News
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