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Management Side
Canadian Lumber Industry Hits Back at `Unfair' Trump Tariffs

CANADA (From news reports) -- Canadian lumber companies criticized new tariffs on imports of softwood lumber to the U.S., calling them unfair and unwarranted, while Prime Minister Justin Trudeau's administration vowed to fight back.

The tariffs of as much as 24 percent announced by the U.S. late Monday are "inappropriate," said Seth Kursman, a spokesman for Resolute Forest Products Inc., the world's largest newsprint maker. The U.S. action is driven by the country's own "protectionist" lumber lobby which is trying to drive up prices for its benefit, industry group B.C. Lumber Trade Council said in a statement.

"You need to recognize this is a highly politicized issue," Kursman said by phone. "The lumber in Quebec and Ontario is not subsidized."

The long-running trade dispute between the two countries over lumber was reignited in November when the U.S. industry filed a petition asking for duties. The U.S. lumber industry alleges Canadian wood is heavily subsidized and imports are harming U.S. mills and workers.

Canada is the world's largest softwood lumber exporter and the U.S. is its biggest market. The trade spat had contributed to a more than 20 percent surge in wood prices since the U.S. election on concern that penalties would increase costs even more.

Montreal-based Resolute will pay a subsidy rate of 12.82 percent on its lumber exports to the U.S., according to a preliminary determination by the U.S. Department of Commerce. While that's lower than West Fraser Timber Co.'s 24.12 percent and below the 19.88 percent average, the company ships about 65 percent of its lumber to the U.S. and doesn't have access to Asia or a footprint in the U.S. south to offset the fee like some Western Canadian producers, Kursman said.

Canada has said it will fight the tariff which is an "unfair and punitive duty" imposed on "baseless and unfounded" allegations, according to a joint statement from Foreign Minister Chrystia Freeland and Natural Resources Minister Jim Carr.

Ontario and Quebec producers should have free unencumbered access to the U.S. market, Kursman said. Quebec now has public auctions for timberland, a system that mirrors how land is sold in the U.S., and a panel under the North America Free Trade Agreement previously determined that any subsidy level in Ontario is de minimus -- negligible -- he said. The fact that Nafta panels have previously rejected U.S. arguments was also cited Monday in a statement from the B.C. Lumber Trade Council, which represents companies including Canfor, West Fraser and Intefor Corp.


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