Panel OKs stiff lumber tariffs

Martin Crutsinger

Thursday, May 2, 2002 | 10:25 a.m.

WASHINGTON -- The U.S. International Trade Commission gave final approval today to the imposition of stiff tariffs on imports of Canadian softwood lumber, ruling that the shipments are harming domestic producers.

The decision, on a 4-0 vote, means shipments of Canadian softwood lumber, used extensively in new home construction, will be hit with penalty tariffs averaging 27 percent. The construction industry estimates the tariffs could add $1,500 to the cost of a typical new home.

However, in a partial victory for the Canadian lumber industry, the commission ruled that the tariffs will not go into effect until later this month. That will mean Canadian producers will receive a rebate of around $1 billion in bonds they had posted for shipments that had come into the country starting last August.

The Canadian companies had been paying an average duty of 32 percent since last year based on an initial determination by the Commerce Department of the amount of subsidies and dumping that were occurring. However, the ITC ruled Thursday that the preliminary fine was not justified. The U.S. government will have to return the punitive tariffs collected through April.

Canadian softwood lumber accounts for about one-third of the U.S. market.

The ITC vote clears the way for the average tariffs of 27 percent to go into effect once the Commerce Department issues the paperwork needed -- probably later this month.

The Commerce Department in March had made its final determination of the tariff levels. But the tariffs could not go into effect until the ITC made its final determination Thursday that U.S. lumber producers were suffering harm.

John A. Ragosta, a Washington attorney representing U.S. lumber producers, hailed the ITC decision, saying the higher tariffs should provide some relief to the U.S. industry. U.S. companies estimate that nearly 100,000 jobs had been lost and over 100 U.S. lumber mills closed over the past three years because of a surge in Canadian imports.

American lumber producers contend that Canada's trade practices overstimulate production there, driving down U.S. prices and harming the U.S. industry.

After completing a yearlong investigation, the Commerce Department determined in March that Canada subsidizes its industry by charging low fees to log public forests. The department also ruled that Canada allows its industry to illegally "dump" lumber in the United States at artificially low prices.