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13 September, 2017

Canadian Lumber Trade Case is Trending Toward a Protectionist Policy Outcome

The Takeaway:

The U.S. International Trade Commission (USITC) held a [hearing]( yesterday in its antidumping (AD) and countervailing duty (CVD) investigation into imports of softwood lumber from Canada. Nearly all impacted companies came under pressure (including RFP, CFP:CN, WFT:CN, PHM, TOL, LEN, DHI, and NVR) when the Department of Commerce International Trade Administration (ITA) – the other agency responsible for AD / CVD investigations – announced on April 24 the preliminary CVD determination in this case. The Trump administration may nullify the entire AD / CVD case, considering it would rather resolve this issue directly with Canada as part of NAFTA renegotiations. Ultimately, due to the fact that the USITC is positioned to find in favor of domestic industry combined with the fact Senator Ron Wyden (D-OR) who plays an oversight role in NAFTA renegotiations supports Canadian lumber tariffs, we do not expect final resolution of this issue will bring any relief to the aforementioned companies. Conversely, petitioners including U.S. lumber company WY and the REIT PCH stand to benefit from increased protectionist U.S. lumber policies.