Congressmembers Kenny Marchant (TX-24) and Brian Higgins (NY-26), members of the House Ways and Means Subcommittee on Trade, led a bipartisan letter to Commerce Secretary Wilbur Ross and United States Trade Representative Robert Lighthizer requesting that the U.S. reengage in discussions with Canada to reach a negotiated agreement on softwood lumber.
The letter signed by 171 members of the House of Representatives acknowledges a contentious history between the United States and Canada on softwood lumber trade but points to a 2006 agreement which brought stability to the market. The Members write, “The 2006 Softwood Lumber Agreement expired on October 12, 2015. With no agreement and tariffs averaging just over 20% in place, lumber prices have skyrocketed, hitting an all-time high this year. We respectfully request that you return to the negotiating table with Canada and redouble your efforts to reach a new softwood lumber agreement.”
Softwood Lumber is used primarily for the wood framing of residential construction. In 2016, the US imported about 33% of its lumber and 94% of that imported lumber was from Canada. Historically, Canada has been the largest foreign supplier of softwood lumber, accounting for 95% of imports since 1965.
On December 7, 2017, the International Trade Commission determined that imports of softwood lumber, previously determined to be dumped and subsidized by International Trade Administration, caused material injury to U.S. producers. Most Canadian producers are now being hit with a tariff rate of approximately 21% on all of their softwood lumber exported to the US. According to the National Association of Homebuilders, the tariffs add an additional $7000 dollars towards the cost of constructing a home, making housing less affordable for consumers.