US-Canada softwood lumber deal still on the rocks

The deal between the US and Canada regarding tariffs on the latter’s softwood lumber exports is seen to fail if no agreement is made by October 12. If this happens, Canada’s softwood lumber that enters the US will be taxed up to 25 percent.

Some US suppliers seek to limit softwood lumber imports from Canada, reasoning out that these are subsidized, therefore creating unfair competition. The Montreal Economic Institute, meanwhile, points out that the move is detrimental not only to Canada, but to US consumers for it already cost the latter $6 billion since 2006. In addition, majority of Canada’s softwood lumber is widely used in US residential projects. If taxed high and replaced with more expensive options, this will also push US housing prices up.

The 2006 softwood lumber deal between the two countries, where one of the terms was to not make a trade case against Canada for a year, was already void in October 2015. In months after and until now, progress in attaining a win-win deal has been slow. Talks have been made in the a G20 Summit held in China early in September but Canada’s International Trade Minister sees the situation as complicated. Canada representatives will still be pursuing the discussions with their US counterparts in the remaining time.

Given the projections, other reports say Canada is looking into other markets for softwood lumber in Asia, particularly China. If its main export market change pushes through, Canada softwood lumber will find its way into more China wooden products.