Alice Palmer

Is Canada swamping the US with cheap lumber? According to the US Commerce Department, the answer is “yes.” On July 25, the US imposed anti-dumping duties of over 20% on softwood lumber imports from Canada. This means that, according to the Commerce Department’s calculations, Canadian companies have been selling lumber into the US at rates some 20% below its fair market value. Yet, softwood lumber is a commodity product, meaning its price fluctuates with the balance of demand and supply in the marketplace. Therefore, lumber companies generally do not set their prices in the way that consumer products companies do. Instead, they negotiate each sale based on the going price market price. While lumber traders may sometimes offer a small discount to make a quick sale, a 20% discount would be unusual, even on a single sales transaction. Companies certainly would not want to sell at 20% below the market for a full year (the reference period over which the US Commerce Department calculates dumping margins). That would be insane. So, how is the US Commerce Department coming up with its numbers?