Sharp words flew across the U.S.-Canadian border in late March, in the wake of a determination by the U.S. Department of Commerce that Canadian lumber producers have sold their products below fair market value.

The U.S. government set export duties of 29% on Canadian softwood lumber on March 22. After a yearlong investigation, the Commerce Department determined Canada subsidizes its lumber industry by charging low fees to log public forests, and allows Canadian lumber firms to illegally dump lumber in the U.S. at artificially low prices.

Canadian lumber producers were hit with two duties, a 19.3% punitive duty for subsidies, and a 9.7% tariff for dumping. Canada called the tariffs "obscene." The duties can't be imposed until a final ruling by the International Trade Commission expected in May. Softwood lumber products covered under the tariff include coniferous wood, wood siding, and flooring.

According to Department of Commerce posted information, softwood imports from the Canadian Maritime provinces of New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland are excluded from the countervailing duty. The exemption does not apply to softwood lumber products produced in the Maritime Provinces listed from Crown timber harvested in any other province.

All producers and exporters are levied the 19.34% subsidy rate. Individual companies were assessed various dumping margins, as follows: Weyerhaeuser 15.83%; Abitibi 14.60%: Tembec 12.04%; S;local 7.55%; Canfor 5.96%: West Fraser 2.26%; and all others 9.67%

U.S. home builders, who have opposed the import duties, alleged the move could add $1,500 to the cost of an average new home, and lock 450,000 people out of the housing market.

Defends Southern Pine

Karl Lindberg, president of the Southern Forest Products Association in New Orleans strongly refuted claims by Canadian officials, reported in national wire service reports claiming that Southern Yellow pine could not replace Canadian wood.

According to a SFPA statement, the comments appeared in an Associated Press story on March 22, reporting on the DOC tariffs. The SFPA says "unnamed officials claim that Canadian lumber ..."can;t be replaced by a prominent U.S. product, Southern yellow pine, because that wood warps too easily."

"Attempting to malign Southern Pine lumber is not going to solve this trade dispute," Lindberg said. "Their statement is unfounded, with no basis in fact. All lumber will warp under given conditions."

The SFPA said, "The American Lumber Standard (ALS) system has established National Grading Rules (NRG) that set uniform requirements for lumber quality, and form the basis for the sale and purchase of virtually all softwood lumber traded in North America. The NGR recognize that all lumber is subject to dimensional change. The rules also set allowable limits on warp (bow, twist, crook) within each lumber grade. These limits are the same for all lumber, regardless of species."

"The mill's objective is to supply the customer with properly graded kiln dried lumber," says Lindberg. "To maintain dimensional stability, ALS-approved grading agencies constantly monitor Southern Pine lumber at the mill and at destination sites, as well. Lumber must be protected from moisture and exposure to the elements during transport, storage, and at the building site."

Lindberg said that Southern Pine is a "prominent" U.S. lumber product for good reason. Top builders specify Southern Pine because they can rely on its superior characteristics. Southern Pine is the species of choice for pressure treatment because its unique cellular structure allows deep, uniform penetration of preservatives, Lindberg said.

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