United States sets tariffs on Canadian lumber

WASHINGTON -- The U.S. government issued duties Friday averaging 29 percent on a popular type of Canadian lumber to protect American jobs and retaliate for what it says are unfair trade practices.

Critics say the move could add $1,500 to the price of a new U.S. home and devastate the Canadian lumber industry, which already has suffered mill closings and job losses from U.S. tariffs imposed last year.

The Commerce Department determined in its investigation that Canada subsidizes its industry by charging low fees to log public lands and allows its producers to sell their lumber in the United States at below-market prices, an illegal practice known as dumping.

"While the final duty rates do not fully offset the amount of injury to the U.S. lumber industry, this decision substantiates the U.S. lumber industry's claim that the Canadian government subsidizes Canadian lumber mills," said Rusty Wood, U.S. Coalition for Fair Lumber Imports chairman.

The ruling involves softwood lumber, commonly used in home construction. The United States imported $5.7 billion worth from Canada in 2001, about a third of the U.S. supply.

The Commerce Department set a 19.3 percent duty to punish Canada for the subsidies and a second tariff averaging 9.7 percent for dumping. The dumping duty varies by company and ranges from 15.8 for Weyerhaeuser to 2.3 percent for West Fraser. Lumber from Canada's Maritime provinces was excluded from both duties.

Canadian International Trade Minister Pierre Pettigrew called the duties "obscene."

"I am sorry that the American administration did not find the nerve to confront its protectionist softwood lumber producers," he said.

The duties can't be imposed until the U.S. International Trade Commission determines if American lumber interests have been harmed by the Canadians. But the commission already has issued a preliminary ruling against the Canadians. The final ruling is expected in May.

It's the second time in a month that the Bush administration has sought to impose tariffs to help a struggling U.S. industry. Earlier it imposed tariffs on steel imports.