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When theUSUSMCAUSUSUSERAYour browser does not support the element. boss of the Lumber Coalition took the podium at the Global Wood Summit in Vancouver in October, he did not have to tell his mostly Canadian audience to hold their applause. “I’m not going to make a lot of eye contact,” Zoltan van Heyningen said, standing before the frosty room.Canadian wood used to flow into the United States at quite a clip (see chart). Exports are now running at levels last seen in the 1970s, thanks to the fact that softwood lumber is the subject of the longest-running trade dispute between the two countries. Since the 1980s the lumber industry in the United States has maintained that Canadian producers receive unfair subsidies in the form of low “stumpage fees” set by provincial Canadian governments, which own most forest land. The United States has periodically placed duties on Canadian imports to “level the playing field”.Canada’s federal government says the duties are “unfair and unwarranted”. In September it filed a challenge under the United States-Mexico-Canada Agreement () after the Department of Commerce increased duties from 8.1% to 14.5%. If Donald Trump is true to his word these will rise to 25% this year, before the challenge is heard. “The has always worried there will be a flood of Canadian wood going across the border, a stream of cheap Canadian products,” said Harry Nelson of the University of British Columbia.Trade war aside, Canada’s lumber industry is suffering, thanks to wobbling prices during the pandemic, and wildfires and insect infestation that have led to mill closures and job cuts. Canfor, a Vancouver-based forestry company, says shipments and production are both down due to high duties and weakness in the North American lumber market. The firm has closed ten of its 13 mills in British Columbia over the last decade. The number of people working in forestry in British Columbia has fallen by more than half this century.Canadians want a new softwood-lumber agreement. The United States was in no hurry to give them one, even before the election of Mr Trump. Austria, Brazil, Germany and Sweden have all recently increased their lumber exports to the United States, which itself is set to become a net exporter by 2027. The most recent -Canada deal expired in 2015. Under that one, some $5bn in collected duties were returned to Canadian producers by the United States government. Canadian industry hopes a new agreement would see collected duties returned once again, up to $10bn by some estimates—not likely under the new Trump administration. Kevin Mason, an analyst with Forest Products Research, takes the long view. “This is a battle going back to the early 1800s,” he says. “It’s not going to change.”
