U.S. commerce chief pressured to carry duties on Canadian lumber By Reuters

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© Reuters. FILE PHOTO: U.S. Commerce Consultant Katherine Tai testifies earlier than the Senate Finance Committee on Capitol Hill in Washington, U.S., Could 12, 2021. Pete Marovich/Pool through REUTERS

By Jarrett Renshaw and David Lawder

WASHINGTON (Reuters) – As U.S. Commerce Consultant Katherine Tai prepares to fulfill her Canadian and Mexican counterparts on Monday to assessment progress within the new North American commerce settlement, she is underneath strain from dwelling builders and lawmakers to chop U.S. tariffs on Canadian lumber.

Shortages of softwood lumber amid hovering U.S. housing demand and mill manufacturing curtailed by the COVID-19 pandemic have brought about costs to triple up to now yr, including $36,000 to the common price of a brand new single-family dwelling, in accordance with estimates by the Nationwide Affiliation of Residence Builders (NAHB).

Republican lawmakers have taken up the builders’ trigger, asking Tai throughout hearings in Congress final week to get rid of the 9% tariff on Canadian softwood lumber imports. Senator John Thune instructed Tai that prime lumber prices had been “having an amazing influence on the bottom” in his dwelling state of South Dakota and placing properties out of attain for some working households.

The Trump administration initially imposed 20% duties in 2018 after the collapse of talks on a brand new quota association, however lowered the extent in December 2020.

“The Biden administration should handle these unprecedented lumber and metal prices and broader supply-chain woes or threat undermining the financial restoration,” mentioned Stephen Sandherr, chief govt officer of the Related Basic Contractors of America. “With out tariff reduction and different measures, important development initiatives will fall not on time or be canceled.”

On Friday, White Home financial adviser Cecilia Rouse mentioned the Biden administration was weighing considerations about commodity shortages and inflation because it critiques commerce coverage.

The tariffs are allowed underneath the U.S.-Mexico-Canada Settlement on commerce, which allows duties to fight value dumping and unfair subsidies.

The U.S. Commerce Division has dominated that lumber from most Canadian provinces is unfairly sponsored as a result of it’s largely grown on public lands with low cost harvesting charges set by Ottawa. U.S. timber is especially harvested from privately-owned land.

Tai mentioned she would deliver up the lumber difficulty with Canadian Commerce Minister Mary Ng on the first assembly of the USMCA Free Commerce Council, a minister-level physique that oversees the commerce deal.

WILLING PARTNER

However Tai instructed U.S. senators that regardless of larger costs, the elemental dispute stays and there have been no talks on a brand new lumber quota association.

“With the intention to have an settlement and with a purpose to have a negotiation, it is advisable to have a companion. And so far, the Canadians haven’t expressed curiosity in partaking,” Tai mentioned.

Youmy Han, a spokeswoman for Canada’s commerce ministry, mentioned the U.S. duties had been “unjustified,” and that Canadian Prime Minister Justin Trudeau has raised the difficulty with U.S. President Joe Biden.

“Our authorities believes a negotiated settlement is feasible and in the perfect pursuits of each international locations,” Han mentioned in an emailed assertion to Reuters.

However builders are rising pissed off with an absence of high-level engagement with high-level Biden administration officers on the difficulty as they watch lumber costs rise.

“They’re clearly nonetheless gathering info, which is much more irritating provided that this difficulty has been occurring since earlier than the election, earlier than the inaugural,” mentioned James Tobin, a vp and high lobbyist on the NAHB.

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