patrick.net

The Canadian government is subsiding their lumber industry by allowing tree removal from federal land at discounted rates so long as the lumber is exported. This made softwood lumber cheaper in the U.S. than in Canada and set up the dumping issue.

[NOTE: This is the same issue with Steel and Aluminum from China]

U.S. lumber mills were going out of business because Canada was dumping subsidized product into the U.S. market at a discounted rate. As a consequence, in 2017 Commerce Secretary Wilbur Ross instituted a 20% tariff on Canadian lumber to protect the U.S. lumber industry. The tariff is a countervailing duty to offset the Canadian subsidy. ie. “zeroing”.


With the 20% tariff, Canadian lumber sold into the U.S. was the same price as Canadian lumber sold in Canada. This allows U.S. lumber mills to compete for U.S. market business on an equal basis.

Instead of removing their federal lumber subsidy (which would have removed the tariff) the Canadian government, via Justin Trudeau, went bananas and sued the U.S. at the World Trade Organization (WTO). Trudeau was counting on prior disputes where the WTO did not side with the U.S. position on the calculations for industry “zeroing”.

However, in a departure from prior WTO opinion; and conceding to the obvious validity of the math while faced with a U.S. president who would not relent; the WTO agreed with President Trump, Secretary Ross and Ambassador Lighthizer and affirmed the 20% tariff as a valid countervailing duty.

https://theconservativetreehouse.com/2019/04/09/u-s-wins-softwood-lumber-tariff-dispute-vs-canada-at-wto/#more-162335