WASHINGTON—As U.S. Commerce Consultant Katherine Tai prepares to satisfy her Canadian and Mexican counterparts on Monday to evaluation progress within the new North American commerce settlement, she is below strain from residence builders and lawmakers to chop U.S. tariffs on Canadian lumber.
Shortages of softwood lumber amid hovering U.S. housing demand and mill manufacturing curtailed by the COVID-19 pandemic have brought on costs to triple up to now yr, including $36,000 to the common value of a brand new single-family residence, in response to estimates by the Nationwide Affiliation of Dwelling Builders (NAHB).
Republican lawmakers have taken up the builders’ trigger, asking Tai throughout hearings in Congress final week to remove the 9 p.c tariff on Canadian softwood lumber imports. Senator John Thune instructed Tai that prime lumber prices have been “having an amazing affect on the bottom” in his residence state of South Dakota and placing houses out of attain for some working households.
The Trump administration initially imposed 20 p.c duties in 2018 after the collapse of talks on a brand new quota association, however diminished the extent in December 2020.
“The Biden administration should tackle these unprecedented lumber and metal prices and broader supply-chain woes or threat undermining the financial restoration,” mentioned Stephen Sandherr, chief govt officer of the Related Common Contractors of America. “With out tariff reduction and different measures, important building tasks will fall delayed or be canceled.”
On Friday, White Home financial adviser Cecilia Rouse mentioned the Biden administration was weighing issues about commodity shortages and inflation because it critiques commerce coverage.
The tariffs are allowed below the U.S.-Mexico-Canada Settlement on commerce, which allows duties to fight value dumping and unfair subsidies.
The U.S. Commerce Division has dominated that lumber from most Canadian provinces is unfairly sponsored as a result of it’s largely grown on public lands with low cost harvesting charges set by Ottawa. U.S. timber is principally harvested from privately-owned land.
Tai mentioned she would carry up the lumber situation with Canadian Commerce Minister Mary Ng on the first assembly of the USMCA Free Commerce Council, a minister-level physique that oversees the commerce deal.
However Tai instructed U.S. senators that regardless of greater costs, the elemental dispute stays and there have been no talks on a brand new lumber quota association.
“With a view to have an settlement and as a way to have a negotiation, you want to have a accomplice. And so far, the Canadians haven’t expressed curiosity in partaking,” Tai mentioned.
Youmy Han, a spokeswoman for Canada’s commerce ministry, mentioned the U.S. duties have been “unjustified,” and that Canadian Prime Minister Justin Trudeau has raised the problem with U.S. President Joe Biden.
“Our authorities believes a negotiated settlement is feasible and in the most effective pursuits of each nations,” Han mentioned in an emailed assertion to Reuters.
However builders are rising annoyed with a scarcity of high-level engagement with high-level Biden administration officers on the problem as they watch lumber costs rise.
By Jarrett Renshaw and David Lawder