US-Canada Lumber Trade War Escalates
The US Lumber Coalition warns that new Canadian subsidies may further disrupt US lumber production and supply chains, escalating ongoing trade disputes. The Bureau of Land Management is simultaneously considering "maximum" logging increases across 2.5 million acres in Oregon, potentially affecting both supply and conservation debates.
- This trade conflict has a long history, with the first dispute, known as "Lumber I," initiated by the U.S. lumber industry in 1982. The core of the disagreement revolves around the U.S. claim that Canadian provincial governments unfairly subsidize their lumber industry by setting administrative prices for timber harvested from public lands, unlike the competitive marketplace in the United States. - The most recent phase of the dispute began after the 2006 Softwood Lumber Agreement (SLA) expired in 2015. This agreement had established a system of export charges and volume restraints on Canadian lumber when prices fell below a certain threshold. - The new subsidies from British Columbia that prompted the most recent warnings involve a "stumpage deferral program." This program is expected to provide between $124 million and $242 million in financial relief to sawmills in the province over an 11-month period. - In addition to these provincial measures, the Canadian federal government has also initiated support programs, including C$700 million in loan guarantees and C$500 million in grants to assist the industry. - Concurrent with the trade dispute escalation, the U.S. Bureau of Land Management's proposal for western Oregon aims to revise resource management plans for nearly 2.5 million acres of forest. The stated goal is to increase timber harvesting to levels seen before the 1990s, which could potentially quadruple the amount of timber logged annually from these lands. - This proposed increase in U.S. domestic logging is rooted in the Oregon and California Revested Lands Sustained Yield Management Act of 1937, which mandates that these lands are managed for timber production to support local counties. Revenue from timber sales funds essential services like schools, public safety, and infrastructure in 18 western Oregon counties. - Conservation groups have expressed concerns that the BLM's plan could eliminate protections for old-growth forests and reduce logging buffers around rivers and streams, potentially harming endangered fish species. - The U.S. has been applying countervailing and anti-dumping duties on Canadian lumber. In October of the previous year, a 10% tariff was imposed on softwood timber and lumber, in addition to existing duties that had been increased from 14.5% to 35%.
