U.S. TO IMPOSE 19 PERCENT TARIFFS ON CANADIAN
Alabama timber producers should benefit from a 19.3 percent penalty tariff on Canadian softwood lumber imports that the Bush administration announced would go into effect Aug. 20.
The tariffs will be imposed on a preliminary basis while the U.S. Commerce Department contemplates a final ruling in the dispute with Canada.
U.S. industry groups filed complaints in April alleging that Canada's lumber was unfairly priced because of government subsidies there and claimed that Canadian lumber was being dumped in this country, selling at prices below the cost in the home market or below the cost of production.
"Last year we had a 40 percent decline in timber sales in Alabama," said Steve Guy, director of the Federation's Forestry Division. "That could be attributed in part to the uncertainty of trade relations with Canada. The sharp decline in the pine pulpwood market in Alabama also has caused a trickle-down effect, forcing down prices for pine saw timber by products."
Softwood lumber, typically used for home construction, comes from cone-bearing trees such as fir and pine trees. The dispute between the U.S. and Canada has been going on for more than a century and involves the amount of "stumpage" fees that Canadian provinces charge companies for logging government lands.
U.S. lumber industry officials claim that the fees are set at unfairly low levels that give the Canadian loggers an unfair advantage. The dispute gained attention this year with the expiration of a five-year agreement that had placed a cap on the amount of softwood lumber that could be imported into the U.S. from Canada.
The cap had been set at 14.7 billion board feet of softwood lumber from Canada's four major lumber-producing provinces. Since the agreement expired on March 31, softwood lumber exports have risen significantly.
"We don't oppose free trade, but it should be fair trade," Guy said. "I'm not sure that the prices for U.S. producers are going to go back up with this tariff in place, but hopefully it will keep them from going any lower."