Lumber war heats up again

Associated Press

WASHINGTON — The government is imposing a second layer of duties on Canadian lumber in an attempt to protect U.S. jobs from what it calls unfair competition. Opponents say American consumers will be hurt by higher prices for wood products.

A 12.6 percent tariff on softwood lumber will be placed on top of a 19.3 percent duty imposed in August, the Commerce Department said Wednesday, further stirring a trade dispute that has gone on for decades.

The Commerce Department also ruled separately on six Canadian forest products companies and set new tariffs for them ranging from 5.9 to 19.2 percent.

"Canada really needs to fix an unfair trade system," said Luke Popovich, spokesman for the Coalition for Fair Lumber Imports, a U.S. industry group. The tariffs "ought to get their attention," he said.

The National Association of Home Builders, which opposes the tariffs, says they will add $1,500 to the price of an average home.

The Canadian lumber industry estimates that the first tariff cost 15,000 jobs and the second will cause more hardship.

Softwood lumber is a popular building product used for home frames, siding, flooring and other purposes. It comes from fir, pine and other cone-bearing trees. The United States imported about $6.4 billion worth from Canada last year, roughly a third of all softwood used in America.

Both tariffs — the first for unfair Canadian government subsidies, the second for dumping wood on the U.S. market at artificially low prices — have been imposed on a preliminary basis by the Commerce Department and the U.S. International Trade Commission.

Softwood lumber is the most tense trade issue between the two countries. U.S. producers say Canada charges unfairly low stumpage fees to companies that log on government lands, allowing Canadian firms to sell lumber in the United States for less than the cost of production. They also say the fees amount to a government subsidy.

In April, the U.S. industry asked the Bush administration to investigate and add tariffs of up to 78 percent.

"Canada has been engaging in a process to keep its people working that has taken jobs from Americans," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee and a supporter of tariffs.

Canadian producers contend their lumber should be shipped into the United States duty-free, reflecting the open trade expected among the United States, Canada and Mexico under the North American Free Trade Agreement.