You may have been surprised by the recent and/or impending price increases on Western Red Cedar lately. This has been caused by a large trade dispute between Canada and the U.S. that has been going on since the 80’s on all softwoods imported from Canada. Not only is this affecting Western Red Cedar, but it also affects Alaskan Yellow Cedar, Douglas Fir, Pine, and a host of other softwoods.
“Canada–United States softwood lumber dispute” Wikipedia
The Canada–U.S.A softwood lumber dispute is one of the largest and most enduring trade disputes between both nations. This conflict was given rise in the early 1980s, and its effects are still seen today. British Columbia, the major Canadian exporter of softwood lumber to the United States, was most affected, reporting losses of 9,494 direct and indirect jobs between 2004 and 2009.
The heart of the dispute is the claim that the Canadian lumber industry is unfairly subsidized by federal and provincial governments, as most timber in Canada is owned by the provincial governments. The prices charged to harvest the timber are set administratively, rather than through the competitive marketplace, the norm in the United States. In the United States, softwood lumber lots are privately owned, and the owners form an effective political lobby. The United States claims that the Canadian arrangement constitutes an unfair subsidy and is thus subject to U.S. trade remedy laws, where foreign trade benefiting from subsidies can be subject to a countervailing duty tariff to offset the subsidy and bring the price of the commodity back up to market rates.
The Canadian government and lumber industry dispute this assertion based on a number of factors, including that Canadian timber is provided to such a wide range of industries and that lack of specificity makes it ineligible to be considered a subsidy under U.S. law. Under U.S. trade remedy law, a countervailable subsidy must be specific to a particular industry. This requirement precludes the imposition of countervailing duties on government programs, such as roads, that are meant to benefit a broad array of interests. Since 1982, there have been four major iterations of the dispute.
For more information on why there has not been a resolution on this, and pricing is going up, we invite you to read this story from Global News published last Fall.
There is, unfortunately, little information regarding what is being done to come to an agreement on the importing of softwoods from Canada; the current deal has expired, and the marketplace is bracing for significant price increases. Most companies implemented some price increases on February 1, 2017.
Because of this, we are doing our very best to honor any price quotes to the best of our ability. However, all material is subject to prior sale, and pricing is subject to change on a daily basis as this shakes out.
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UPDATE – May 2, 2017
Here is a great article on who the 20% imposed tariff would affect the most and the approximate cost of a new home published by The Hill
UPDATE – August 1, 2017
Canadians are “Hopeful” for a softwood deal with the US this month. Read more HERE
UPDATE – November 7, 2017
Canada to dispute decision on the softwood agreement with the US. The U.S. International Trade Commission will make a final rule on the issue by Dec. 18. Read more HERE