{"id":29475,"date":"2025-10-22T13:10:12","date_gmt":"2025-10-22T03:10:12","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=29475"},"modified":"2025-10-22T13:10:16","modified_gmt":"2025-10-22T03:10:16","slug":"new-tariffs-and-duties-make-zero-sense-for-u-s-lumber-heres-why","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/new-tariffs-and-duties-make-zero-sense-for-u-s-lumber-heres-why\/","title":{"rendered":"New Tariffs and Duties Make Zero Sense for U.S. Lumber \u2014 Here&#8217;s Why"},"content":{"rendered":"\n<p>The United States\u2019 new tariffs on softwood lumber, which have added a global 10 per cent levy on top of countervailing and anti\u2011dumping duties, have raised costs for exporters and renewed scrutiny of how Washington calculates dumping margins. Taken together, <a href=\"https:\/\/woodcentral.com.au\/expect-price-hikes-us-taxes-on-canadian-lumber-could-hit-50\/\">the measures have effectively pushed direct and indirect taxes on Canadian suppliers above 40 per cent<\/a>, with critics arguing that the measures reflect a choice of calculation rather than clear evidence of misconduct.<\/p>\n\n\n\n<p>That is according to Alice Palmer, a freelance researcher and consultant with a PhD in forestry, an MBA and more than 20 years in the Canadian forest sector,<a href=\"https:\/\/substack.com\/home\/post\/p-174054595\"> who called the national\u2011security rationale \u201cludicrous,&#8221; before adding that \u201cusing national security as an excuse for tariffs is transparent political theatre.\u201d <\/a><\/p>\n\n\n\n<p>Palmer\u2019s work focuses on the Commerce Department&#8217;s use of a contested practice called \u201czeroing\u201d when it computes anti\u2011dumping margins. Zeroing treats U.S. sales priced above an exporter\u2019s domestic average as if they do not exist, preventing higher\u2011priced transactions from cancelling out lower\u2011priced ones and making ordinary short\u2011term price dips look like systematic dumping: \u201cZeroing removes the balancing effect of higher\u2011priced transactions and injects an obvious statistical bias that overstates dumping,\u201d <a href=\"https:\/\/alicepalmer.substack.com\/p\/us-duty-calculations-on-canadian?utm_source=post-email-title&amp;publication_id=1017142&amp;post_id=176694292&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=46jejs&amp;triedRedirect=true&amp;utm_medium=email\">Palmer said.<\/a><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-4-3 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"youtube-embed\" data-video_id=\"94W49EqchII\"><iframe loading=\"lazy\" title=\"80: Zeroing: The Biggest WTO Threat You\u2019ve Never Heard Of (#45)\" width=\"696\" height=\"522\" src=\"https:\/\/www.youtube.com\/embed\/94W49EqchII?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><figcaption class=\"wp-element-caption\"><em>Keynes and Bown explain how a tiny part of US antidumping tariff calculations threatens the entire trading system. Footage courtesy of <a href=\"https:\/\/www.youtube.com\/@PetersonInstitute\">@PetersonInstitute.<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p>As one of the world&#8217;s most traded commodities, lumber prices fluctuate daily due to rapidly changing supply and demand; mills sell at the current market rate rather than setting fixed retail prices. Anti\u2011dumping cases compare an exporter\u2019s domestic \u201cnormal value\u201d with its U.S. export price. When prices fluctuate, straightforward averaging typically allows highs and lows to offset each other, resulting in a zero dumping margin. But when investigators apply zeroing, market volatility can be turned into large calculated margins. <\/p>\n\n\n\n<p>In the Commerce Department\u2019s most determinations, this approach, combined in some cases with \u201cconstructed values\u201d (manufacturing costs plus allowances) to represent domestic prices, produced anti\u2011dumping duties above 20 per cent.<\/p>\n\n\n\n<p>Lumber prices spiked in late 2022 and then fell in 2023 while some Canadian cost inputs, notably stumpage fees, lagged. That mismatch made the constructed normal values appear high, while selling prices were low. \u201cThe high dumping margins calculated for 2023 are not reflective of Canadian mills exporting at unfairly low prices; they reflect market volatility and a lag in cost adjustments, not predatory pricing,\u201d <a href=\"https:\/\/alicepalmer.substack.com\/p\/us-duty-calculations-on-canadian\">Palmer said. <\/a>\u201cBoth Canadian and U.S. sawmills sometimes sell at low prices, but only Canadian mills are penalised.&#8221;<\/p>\n\n\n\n<p>The wider market picture also undercuts claims that Canadian imports are the cause of U.S. oversupply. Since 2016, Palmer said U.S. producers have added 9 billion board feet of capacity, much of it in southern yellow pine, creating domestic oversupply and depressing SYP prices. Canadian shipments are dominated by spruce\u2011pine\u2011fir, a different species many builders prefer for framing; forcing substitution between species is neither straightforward nor always possible.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"2560\" height=\"1915\" src=\"https:\/\/woodcentral.b-cdn.net\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1.jpg\" alt=\"U.S. Customs has withheld substantial duties and tariffs on cross\u2011laminated timber and solid lumber panels imported into the United States, creating large suspended collections that could be subject to mass refund claims if the Supreme Court overturns the country\u2011based levies (Photo: Derek Trash \/ Alamy).\" class=\"wp-image-29198\" srcset=\"https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1.jpg 2560w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-300x224.jpg 300w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-1024x766.jpg 1024w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-768x575.jpg 768w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-1536x1149.jpg 1536w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-2048x1532.jpg 2048w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-561x420.jpg 561w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-80x60.jpg 80w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-696x521.jpg 696w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-1068x799.jpg 1068w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-1920x1436.jpg 1920w, https:\/\/woodcentral.com.au\/wp-content\/uploads\/2025\/10\/PNCBRR-scaled-1-265x198.jpg 265w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\" \/><figcaption class=\"wp-element-caption\"><a href=\"https:\/\/woodcentral.com.au\/why-a-3-4-price-range-is-key-to-canada-usa-lumber-dispute\/\">Last year<\/a>, Wood Central revealed that price was the main driver of the decades-long North American softwood dispute, with economists identifying a 3.4% band as the sweet spot for substitutability between the United States and Canada. The study \u2013 published in the Forest Policy and Economics \u2013 found that consumers and builders are more likely to consider product substitutes when the price difference between Canadian SPF and US SYP is within the 3.4% sweet spot:(Photo: Derek Trash \/ Alamy).<\/figcaption><\/figure>\n\n\n\n<p>According to Palmer, zeroing has a long legal history and has been repeatedly challenged at the World Trade Organisation. Although some rulings allow limited use, the WTO appeals mechanism remains constrained. The immediate effects of the combined levies are higher costs for imported SPF, potential market disruption for Canadian exporters and upward pressure on U.S. construction input prices. Analysts and industry voices say policy would better serve the sector if it shifted from trade containment toward growing demand, product innovation and supply\u2011chain resilience. \u201cIf the goal is a stronger domestic industry, invest in market expansion, product innovation and supply\u2011chain resilience,\u201d Palmer said.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>To learn more about anti-dumping and why the calculations are flawed, <a href=\"https:\/\/alicepalmer.substack.com\/p\/why-anti-dumping-duties-make-no-sense\">click here for Palmer&#8217;s Why Anti-Dumping Duties Make No Sense in Commodity Markets (Part 1)<\/a> and <a href=\"https:\/\/alicepalmer.substack.com\/p\/us-duty-calculations-on-canadian?utm_source=post-email-title&amp;publication_id=1017142&amp;post_id=176694292&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=46jejs&amp;triedRedirect=true&amp;utm_medium=email\">US Duty Calculations on Canadian Lumber Are Flawed (Part 2).<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The United States\u2019 new tariffs on softwood lumber, which have added a global 10 per cent levy on top of countervailing and anti\u2011dumping duties, have raised costs for exporters and renewed scrutiny of how Washington calculates dumping margins. Taken together, the measures have effectively pushed direct and indirect taxes on Canadian suppliers above 40 per [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":29336,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"default","_twitter_share_type":"default","_linkedin_share_type":"default","_pinterest_share_type":"default","_linkedin_share_type_page":"","_instagram_share_type":"default","_medium_share_type":"default","_threads_share_type":"default","_google_business_share_type":"default","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[51,37,32,46],"tags":[],"ppma_author":[69],"class_list":{"0":"post-29475","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-americas","8":"category-building-and-construction","9":"category-global-news","10":"category-industry"},"authors":[{"term_id":69,"user_id":1,"is_guest":0,"slug":"woodcentral","display_name":"Wood Central","avatar_url":{"url":"https:\/\/woodcentral.com.au\/wp-content\/uploads\/2023\/02\/MASTER-BRAND-MARK_POS_RGB-e1676449549955.jpg","url2x":"https:\/\/woodcentral.com.au\/wp-content\/uploads\/2023\/02\/MASTER-BRAND-MARK_POS_RGB-e1676449549955.jpg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/29475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/comments?post=29475"}],"version-history":[{"count":3,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/29475\/revisions"}],"predecessor-version":[{"id":29478,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/29475\/revisions\/29478"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/media\/29336"}],"wp:attachment":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/media?parent=29475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/categories?post=29475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/tags?post=29475"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/ppma_author?post=29475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}