Posted August 25, 2020

WTO finds in Canada’s favor in softwood lumber dispute

NAHB lauds WTO decision and urges the U.S. and Canada to revisit tariff structure. 

Since April, soaring lumber prices have added $16,000 to the price of a new home.

The United States inappropriately applied countervailing duties on Canadian softwood lumber, according to a World Trade Organization (WTO) dispute settlement ruling issued today.

The WTO report came in response to Canada’s challenge of the U.S. Commerce Department’s imposition of countervailing duties on Canadian softwood lumber in 2017, after the countries failed to reach a new agreement on softwood lumber.

In its finding, the WTO is asking Commerce to reassess duties imposed on Canadian softwood lumber in a way that conforms with international obligations under the World Trade Agreement.

“The WTO report could not have come at a more important time,” said NAHB Chairman Chuck Fowke. “America’s home builders need a sound trade agreement to ensure a consistent supply of reasonably priced lumber. The WTO ruling could provide the impetus for a resumption of trade talks between the United States and Canada.”

In recent months, U.S. home builders have experienced a dramatic increase in lumber prices, as strong demand exceeds supply. Since mid-April, prices have increased more than 130%. As a result, the price of the average new single-family home has risen more than $16,000, and the price for an average new multifamily unit has gone up over $6,000.

Since the U.S.-Canada Softwood Lumber Agreement expired in October 2015, NAHB has been urging U.S. officials to sit down with their Canadian counterparts to work out a lasting agreement on imports of Canadian softwood lumber.

In recent weeks, NAHB has repeated its request that Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer re-engage with Canadian officials and hammer out a long-term agreement on softwood lumber that works for both nations. NAHB is also asking the U.S. Lumber Coalition to find ways to increase production in response to strong demand.

Read more on about how NAHB is pushing for lower lumber prices.