The topic of export duties on Canadian lumber exports to the U.S. is now revving up, given the announcement by the US ITC this week.

On January 9, 2017, the US International Trade Commission (US ITC) ruled on its Preliminary Determinations regarding injury from the imports of softwood lumber products from Canada. The U.S. Department of Commerce (DOC) is to continue conducting its countervailing (CVD) and antidumping duty (ADD) investigations on U.S. imports of lumber from Canada and to recommend export duties.

On Thursday May 4, 2017, the DOC’s Final Determination on a countervailing duty determination is due – the same day its preliminary antidumping duty determination will be announced.

The results of these investigations will trigger market chaos, as Canadian mills will need to try to dramatically increase U.S. lumber prices to counter the effects of punitive export duties. A combined duty of 30+% is now expected and the impact of the duty is expected to cause some Canadian mills to curtail and even close permanently. At the same time, a greater focus on offshore export markets is expected by Canadian mills to reduce their dependence on the U.S. market – this is expected to cause some disruptions in the Chinese market.

On Tuesday May 9, 2017, and against the uncertain lumber trade environment, British Columbia will hold its next provincial general election. This, in conjunction with President-elect Trump, will add more political drama to the lumber business and trade.

From International Wood Markets: