Issue link: http://palletcentral.uberflip.com/i/842358
36 PalletCentral • May-June 2017 palletcentral.com TRADE "The announcement on May 8th on Countervailing Duties (CVD) of 19.88 per cent with a ninety-day retroactive period against certain wood packaging products manufactured from softwood lumber (SPF) has affected a number of Canadian exporters adversely. In the wood packaging industry, the area most affected is the annual export trade of around 300,000 mbf of unassembled pallets (HTSUS 4415.20.8000) and notched stringers (HTSUS 4415.20.8000). Also affected are smaller volumes of softwood lumber pallet cut stock. Many of the manufacturers affected had anticipated the duties but have not been able to pass on the increase to their customers. As such, they began curtailing operations early this year. Most have lain off staff, but some have closed operations altogether. The impact that will be felt by U.S. pallet manufacturers is considerable; they are faced with replacing long established supplies of high quality SPF raw material with substantially higher priced domestic material. From an overall industry perspective, unassembled pallets and pallet cut stock exports represent two percent of overall Canadian wood packaging production but the recent CVD decision has created a large amount of confusion and uncertainty around other exports. It's unclear whether assembled pallets were targeted in the Scope of Investigations into Countervailing Duties and Antidumping (assembled pallets trade using the same HTSUS code as unassembled pallets as historically they were both considered finished products and exempt from duty) Exporters are also experiencing confusion at the border and transportation delays are expected. Exports of non-targeted species such as aspen pre-cut material has seen prices rise and demand strengthened in the last few months This trade dispute was supposed to be about softwood lumber exports of dimensional lumber but a wide variety of finished products made of softwood have been targeted as well, and the CVD announcement has forced many secondary producers who cannot pass on the increased costs to look for alternative markets." — Brian Isard, Canadian Wood Pallet & Container Association