A coalition of Canadian lumber producers, led by the federal government, is fighting a US dumping investigation hidden behind higher-priced sales, with the Commerce Department finding significant price gaps across more than 99 per cent of Canfor’s and West Fraser’s American sales by value. It comes as the coalition filed a notice of appeal last Wednesday, after the US Court of International Trade upheld the test in July.
“Commerce reasonably determined that prices differed significantly,” Judge Jennifer Choe-Groves ruled in New York, rejecting claims that the test produced arbitrary results. Canfor and West Fraser were the two producers Commerce examined in its review of 2021 shipments, and on the recalculation, the department set their dumping margins at 5.25 per cent and 7.06 per cent.
The appeal now goes to the US Court of Appeals for the Federal Circuit, the court that ruled against Commerce’s old statistical test in an unrelated case last year. Commerce dropped the measure to comply with that ruling and brought in a test that treats a price gap of 2 per cent or more as significant.
Coalition members argued that US lumber prices swing outside their control, evidence they said “dispels the notion that targeted dumping is occurring at all.” They also noted Commerce rejected a 2 per cent test in a 2008 steel nails case, saying it “does not account for price variations specific to the market in question.”
In reply, Commerce said its old nails test shared only the 2 per cent threshold with the new one, a line it already applies elsewhere in its dumping rules. Sawmill owner Sierra Pacific Industries and the US lumber industry committee that brought the original dumping case sided with Commerce, arguing the open-ended word “significantly” gives the department flexibility.
Canada has fought Commerce’s method on more than one front, appealing a World Trade Organization panel’s findings on it in 2019. It took this review to the trade court three years ago, whilst sending its challenge to that year’s subsidy duties to a panel under the Canada-United States-Mexico Agreement.
As it stands, the Government of Canada expects Commerce to issue final rates in its seventh review next month, with cash deposits set in the sixth review holding until then. Those antidumping and countervailing deposits are charged on top of the 10 per cent Section 232 tariff on softwood lumber imports, which took effect last October.
