In a preliminary ruling, the U.S. Department of Commerce said it plans to reduce duties on shipments of Canadian softwood lumber in the U.S. After conducting an administrative review, the Department has issued a proposal in the Federal Registrar to lower countervailing and antidumping duties to 8% from 20%. A final ruling will take place in August.
Lumber prices have steadily climbed since June of 2019. The Random Lengths Framing Composite Price hit $388 per thousand board feet on January 31, the highest level since October 2018, and 20% higher than the price in May 2019. The National Association of Home Builders (NAHB) stated a recovering housing market is helping fuel the increase in lumber prices.
As of the preliminary decision, the duty rates are set to be 9.08% from 23.56% for West Fraser; 4.63% from 20.52% at Canfor; 15.84% from 17.9% at Resolute Forest Products; 4.32% from 9.38% at J.D. Irving; and 8.21% for all other importers. A NAFTA panel determined in September 2019 that the U.S. lumber industry was not being undermined by imports from Canada.
The NAHB said the potential reduction in duties is “good news” for home builders and home buyers. Lower tariffs would mitigate uncertainty and volatility and could help ease upward pressure on lumber prices, according to the NAHB.