The Softwood Imports to U.S. from Europe flourish thanks to U.S. Duties on Canadian Industry
U.S. imports of softwood from Germany have grown tenfold in the first half of the year as punishing duties pushed imports of Canadian softwood down.
RBC Capital Markets analyst Paul Quinn estimates Canadian lumber producers have plunked down $500 million so far in countervailing and antidumping duties since the spring.
The U.S. alleges Canada unfairly subsidizes its softwood industry and has slapped on import taxes averaging 26.75 per cent as punishment.
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Jerry Howard, CEO of the National Home Builders Association in the U.S., said:
“When Canadian lumber is more reasonably priced it’s not that viable of an option. The Germans this time were poised to take advantage of it and I think that they have.”
In the first six months of this year, German softwood imports into the U.S. soared more than 900 per cent over the same period last year.
Germany’s share of imports rose from 0.35 per cent in the first six months of 2016, to 3.6 per cent this year.
It seems that Germany wasn’t the only beneficiary. Austrian softwood imports were up 178 per cent, Romania was up 141 per cent, Russia 42 per cent and Sweden 41 per cent.
The second quarter 2017, for six Canada’s biggest softwood producers, revealed the impact of the duties. Canfor deposited the most at $34.8 million, followed by West Fraser which paid $34 million. Resolute has deposited $4 million, Interfor $7.3 million, Western Forest Products $9.2 million and Conifex $4.6 million. Most companies are being asked to pay the duties retroactively for 90 days. Interfor’s quarterly report suggests that could amount to another $11.4 million for it alone. The last time there was a softwood trade dispute, the U.S. collected $5.2 billion in duties over five years and the settlement in 2006 included a clause that the U.S. would repay $4.5 billion of it.