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May-June 2017

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based, plus the entire economic supply chain related to U.S. logging. They're happy with the early action taken by President Trump. On the other side you'll find (unsurprisingly) all of Canada (logging to them is like movie-making or the software coming out of silicon valley). But also, there are plenty of U.S. interests that are opposed to the tariff: homebuilders, lawmakers who believe in free-trade (which includes most Republicans in the Congressional majority), some retailers that sell lumber. Even the Heritage Foundation has opposed this, pointing to harm that will occur to other sectors of the economy and how Canada could sell their lumber to Asia while the U.S. ends up with higher prices in the long run. Then there are some Canadian lumber companies with a large presence operating in the U.S. that could benefit either way. The U.S. Department of Commerce will play the primary role in tariff determinations which are levied at specific companies or industries at their discretion (subject to U.S. law and treaties, of course). Secretary Wilbur Ross has taken a conciliatory tone toward Canada on the tariff changes. The U.S. Commerce Department is expected to make a final determination to the anti-dumping case by June 23, 2017. There has been no progress to date on the Softwood Lumber Agreement or expected timeline for completion. On May 18, 2017, the United States officially indicated its desire to enter into discussions on renegotiating NAFTA, triggering a 90-day consultation window before formal talks begin. It is highly unlikely a new Softwood Lumber Agreement would occur prior to the NAFTA negotiations. Continue to follow updates on the U.S. and Canada softwood lumber trade issue at: PalletCentral.com/SoftwoodIssue. PC 38 PalletCentral • May-June 2017 palletcentral.com This article is compiled from various resources, including The U.S. Lumber Coalition, Canadian Wood Pallet & Container Association, National Association of Home Builders, U.S. Department of Commerce, the International Trade Commission, David Payne, presi- dent of CODAVATE, members of the NWPCA, among others. Follow updates at PalletCentral.com/SoftwoodIssue. "Our law firm represents the National Association of Home Builders (NAHB) in the unfair trade litigation. Softwood lumber is one of the most significant raw materials used in housing construction. It takes about 15,000 board feet to build a typical single-family home. Overall, Canadian and U.S. softwood lumber comes from different species of trees which yield lumber with different performance characteristics. NAHB's members need access to readily available and competitively priced softwood lumber from both sources in order to build homes for Americans with the right lumber for the job. As a result of the Commerce Department's initial duties of roughly 20 percent for most Canadian softwood lumber exporters, softwood lumber supply has constricted and prices have fluctuated wildly in 2017. NAHB's economists track the impact of price fluctuations on home prices. Overall lumber price increases in 2017 have added almost $3,600 to the price of a new home. The Commerce Department is set to announce additional duties in June which will make matters worse. NAHB is strongly opposed to this protectionist action. The government is tying one arm behind the backs of the home builders who contribute greatly to the overall economy. The home buyer suffers the most. The lesson from decades of fights between the U.S. and Canada is that nobody wins in these trade cases. Sensible solutions are needed, not more protectionist import duties." — Jeff Grimson, Mowry & Grimson, PLLC

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