OTTAWA (Reuters) - Canada will challenge what Ottawa says is an "unfair, unjust and illegal" U.S. extension of tariffs on imports of Canadian softwood lumber products, Canada's trade ministry said on Tuesday.
The softwood tariffs are the product of a decades-long trade dispute over the structure of Canada's lumber industry that was not resolved when the quota agreement expired in 2015. U.S. producers say Canada unfairly subsidizes its lumber industry.
The U.S. Commerce Department imposed a 7.99% tariff on the product in July.
Canada submitted a notice of intent to pursue a judicial review of the tariffs on Monday, Canada's trade ministry said in a statement, adding that Ottawa remains open to discussing the outcome of the negotiations with Washington. The ministry routinely raises challenges under the rules of the U.S.-Mexico-Canada trade pact.
"Over the years, the United States has imposed unfair, unjust and illegal tariffs on Canadian softwood lumber, harming Canadian industry and increasing housing costs in both countries," Trade Minister Marie U said in a statement.
The U.S. bases its tariffs on the grounds that Canadian lumber harvested from federal and provincial lands (with low government-set stumpage fees) constitutes an unfair subsidy, while most U.S. lumber is harvested from private land at market prices .
The USTR said it was working to ensure a level playing field.
"When Canada is ready to address fundamental issues related to subsidies and fair competition, we are prepared to discuss another softwood agreement so that Canadian lumber imports do not harm U.S. industry," a USTR spokesman said in an emailed statement. .”
The Commerce Department did not immediately respond to a request for comment.