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The U.S. is in the midst of negotiations with Canada over an agreement on Canadian lumber imports. Many U.S. sawmill owners argue that the Canadian mills receive government subsidies on government-owned lands, making it difficult for the U.S. market to compete.

The 2006 softwood lumber trade agreement, meant to level the playing field, expired last year and a one-year freeze on tariffs, a tax on imported goods and services, ends in October. The uncertainty of new tariffs is affecting timber markets.

The U.S. and Canadian governments have been at odds for decades on whether Canadian sawmills receive government subsidies, particularly “stumpage” fees, a tax on harvested trees. Mills in the states say that gives Canadian producers an unfair advantage in the U.S. market.

The deal that was struck in 2006 was renewed in 2012. It was designed to keep Canadian timber within a certain price range. If it fell below that range, then tariffs would be enacted. The deal expired last October, kicking in a one-year standstill period, including a freeze on U.S. tariffs.

From KTOO Public Media: http://www.ktoo.org/2016/09/13/u-s-canada-trade-deal-creating-uncertainty-southeast-timber-market/