Let’s make a deal with Canada on softwood, U.S. senators urge Biden administration

Two U.S. lawmakers are urging the Biden administration’s trade ambassador to make a deal with Canada on softwood lumber.

Democrat Sen. Bob Menendez of New Jersey and South Dakota Republican Sen. John Thune also say further tariff relief on imports from Canada would take inflationary pressure off the U.S. housing market.

They are urging U.S. Trade Representative Katherine Tai to pursue a new softwood deal for long-term relief in a market where about 30 per cent of the timber used in the U.S. comes from Canada.

Tai says the U.S. is willing to talk, but that Canada must address the federal fee regime that American producers say creates an uneven playing field — the core issue in a trade dispute that has persisted for decades.

In November, the Department of Commerce doubled the softwood lumber tariff rate to 17.9 per cent, but decided earlier this year to lower it to 11.64 per cent.

Ottawa sets stumpage fees for lumber harvested from federal and provincial land that producers in the U.S. — forced to pay market rates — have long insisted amount to an unfair subsidy.

Even lower tariffs would “make home construction and homeownership more affordable for communities across our country,” Menendez and Thune wrote Monday in a letter to Tai and Commerce Secretary Gina Raimondo.

Since the last softwood lumber agreement between the two countries expired in 2015, softwood lumber prices have more than doubled, they write.

“Addressing lumber trade inefficiencies would help reduce unnecessary financial pressures on the U.S. housing market,” the letter reads.

“We urge the U.S. trade representative to prioritize a new softwood lumber agreement between America and Canada.”

This report by The Canadian Press was first published July 20, 2022.