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Lumber tariffs harm consumers, housing affordability: Home builders

March 25, 2002
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A 29 percent duty on Canadian softwood lumber shipments into the U.S. imposed in a final ruling by the U.S. Commerce Department is bad trade policy and bad economic policy, the nation's homebuilders said.

WASHINGTON--A 29 percent duty on Canadian softwood lumber shipments into the U.S. imposed in a final ruling by the U.S. Commerce Department is bad trade policy and bad economic policy that will harm housing affordability by acting as a new hidden tax on American home buyers, renters and consumers, the nation's home builders said.

"We're in the midst of a housing-led economic recovery, with housing activity providing millions of jobs each year and accounting for 14 percent of the nation's Gross Domestic Product. Thousands of small and large businesses rely on the housing industry--from carpet manufacturers to home furnishing retailers," said Bobby Rayburn, a home builder from Jackson, Miss. and vice president and treasurer of the National Association of Home Builders (NAHB). "Why does the government want to move at this critical time to slap a tax increase on lumber that will drive up the cost of housing and all kinds of wood products for millions of consumers and workers in lumber-dependent industries? This action threatens the very industry that is leading our economic recovery,"

The Commerce Department's determination that Canada subsidizes its lumber production by under-pricing timber harvested on publicly-owned lands used comparisons to prices of timber in U.S. forests that were misleading and were inconsistent with established rules for calculating subsidies, according to Rayburn.

"Independent trade panels have reviewed Canada's timber pricing on three separate occasions," said Rayburn. "In each case that was taken to a final decision, it was ultimately determined that the Canadian government did not provide unfair subsidies."

Rayburn added, "We don't want artificially low or high lumber prices. What we want is for prices to be determined by supply and demand. Slapping a 19.34 percent countervailing duty and 9.67 percent anti-dumping duty on Canadian softwood lumber imports runs contrary to free market principles, makes the lumber supply less responsive to market demand and harms consumers by increasing volatility in the marketplace."

Home building and remodeling account for two-thirds of lumber consumption in the U.S., and lumber is the primary building material used in home building. Because there are not enough trees available in the U.S. to produce the lumber needed for home building, Rayburn said that Canadian lumber imports are absolutely vital for the construction of affordable new homes and to make improvements on existing homes in America.

The case will now go back to the independent U.S. International Trade Commission, which must issue a final ruling by mid-May on whether U.S. lumber producers are injured by imports.

For further information, contact the National Association of Home Builders at (202) 266-8252, or on the Internet at www.nahb.com.

The National Association of Home Builders is a federation of more than 800 state and local builders associations throughout the U.S. The mission of this Washington, D.C.-based trade association is to enhance the climate for housing and the building industry, and to promote policies that will keep housing a national priority. Chief among NAHB's goals is providing and expanding opportunities for all consumers to have safe, decent and affordable housing. About one-third of its 205,000 members are homebuilders and/or remodelers.

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