Knock on wood

Associated Press

AND HERALD STAFF

SEATTLE — For 50 years, a tiny company called Shakertown has produced and sold cedar shingle panels, employing nearly 50 people in the small southwest Washington town of Winlock.

Now, the company says, a government decision to impose duties averaging 29 percent on Canadian softwood lumber could cost it $1 million, making the business unprofitable. To survive, Shakertown said Friday it may be forced to move to Canada and put its U.S. workforce — already reduced to 32 people because of temporary tariffs — out of work.

"I’m assuming (the government) would like to create jobs for people," operations manager Brian Gabbard said Friday. "The way this decision affects us, it gives the appearance that we don’t like to keep jobs here."

The U.S. government issued the duties Friday in an effort to protect American jobs and retaliate against what it says are unfair trade practices such as selling wood below market prices, known as dumping.

The duties will take effect if the U.S. International Trade Commission rules that the U.S. industry was harmed, a decision expected in May. The U.S. Coalition for Fair Lumber Imports, which says it represents 75 percent of U.S. lumber production, has been pushing hard for the duties and says they don’t go far enough to offset the injury the Canadian imports are causing U.S. companies.

Bob Waltz, owner of Seattle Snohomish Mill Co., which employs 140 workers at its facility in Snohomish, said it’s been hard to compete while Canadian mills have continued to ship large amounts of cheap lumber to the United States.

"As it has stood in the last year or so, when the economy’s been difficult, we’re the ones who have been forced to slow down production," Waltz said.

While the duties may help raise market prices for logs and cut lumber, he added that he’s not in favor of long-term duties as ideal solution.

"This will put an awful lot of pressure on Canada to reach a settlement," he said. "I personally would prefer a settlement to the countervailing duty."

Other U.S. companies, ranging from tiny Shakertown to massive Weyerhaeuser, charge that the duties will cost the timber companies that depend on Canadian wood millions of dollars.

Weyerhaeuser in Federal Way said it would be forced to pay a 35 percent duty on wood products from its Canadian operations if the decision is finalized in May.

"The 35 percent tariff on wood products from Canada is unfair," Weyerhaeuser spokesman Frank Menizabal said.

The U.S. government also has charged that the Canadian government essentially subsidizes the timber business there by charging low fees to log public lands. But Mendizabal said the Canadian government simply uses a different system, and it’s impossible to compare it to the U.S. system.

Mendizabal said Weyerhaeuser hasn’t yet determined exactly what the financial impact of the tariffs would be on a company already struggling with a strong downturn in the lumber market. But he said the company was considering appealing the decision because it does not know if it could continue its Canadian timber operations in the long term if the tariff stands.

"We’re very disappointed that the two governments were not able to find a long-term and enduring solution," he said.