Canada to appeal WTO ruling over U.S. softwood lumber tariffs

the trump administration imposed anti-dumping tariffs on canadian softwood lumber in 2017. PHOTO: Tony Hisgett/FLICKR

The Canadian government announced that it plans to appeal a World Trade Organization (WTO) ruling over how the U.S. applies tariffs on softwood lumber.  

“Canada’s forest industry sustains hundreds of thousands of good, middle-class jobs in communities across our country,” Foreign Minister Chrystia Freeland said in a statement on April 15. “We firmly believe that the U.S. duties on Canadian softwood lumber are unfair and unwarranted. That is why we are challenging these duties at the WTO and under NAFTA.”

Canada will appeal an April 9 ruling by the WTO. That ruling found that the U.S. broke international trade rules, but agreed that the U.S. could use its controversial method of calculating anti-dumping tariffs called zeroing.

Zeroing factors transportation and handling costs in a product’s final price when assessing whether it has been subject to dumping. Freeland characterized it as “a method of calculating and applying artificially high and unfair duty rates, inconsistent with WTO rules.”

The Trump administration imposed tariffs on Canadian softwood lumber of up to 24 percent in 2017, covering more than $5.6 billion in goods. Canada, in turn, took the case to the WTO.

The U.S. has accused Canada of unfairly subsidizing the softwood lumber industry and dumping products onto the U.S. market. The practice has caused “material injury to U.S. softwood lumber producers,” according to the U.S. Department of Commerce.

The countries have clashed over softwood lumber since the early 1980s.

Last week, Canadian officials suggested that the government may impose retaliatory tariffs on additional U.S. products in response to continued levies on aluminum and steel.