Steve Swanson, president of Swanson Group, said the market is looking good for his company’s wood products, and not just because of tariffs placed on Canadian softwood lumber imports.
Based in Glendale, Swanson Group produces dimensional lumber, plywood panels, veneers and residential products, studs and sign-making panels. The company filed a petitioned Feb. 14 for trade adjustment assistance from the Department of Labor to help employees that could potentially be laid off because of the Canadian competition.
Swanson said that has since been resolved and the affected employees all have the opportunity to continue working in the industry.
GLENDALE — Potentially hurt by competition with Canadian softwood lumber, Swanson Group, a w…
“When we went from a shift and a half to one shift at our Roseburg stud mill, that impacted 34 people,” Swanson said. He said all of them were offered other positions within Swanson Group, and some of them took those while others have gone on to work for other companies.
A group of U.S. lumber mills, including Swanson Group, allege they’ve been negatively affected by imports of Canadian softwood lumber.
On Dec. 7, the International Trade Commission agreed, announcing the U.S. wood products industry is materially injured by subsidized Canadian imports of softwood lumber. Due to this finding, a 20 percent tariff has been imposed on the sales value of softwood lumber. The funds from the tariff are collected at the U.S.-Canada border and go to the U.S. Department of the Treasury.
“There’s a review period and if the subsidies have gone up, the tax rate goes up, and if the subsidies go down the tax rate goes down, and that will continue in perpetuity,” Swanson said.
Swanson said representatives of the Canadian industry have filed appeals with the World Trade Organization and North American Free Trade Agreement.
Canadians in the softwood market Steven Rastja and Ron Chantaj both say Canadian softwood is hurting the U.S. markets.
Chantaj, a trading group manager for Timber Mart in Ontario, Canada, said lumber prices are through the roof, so it doesn’t make sense to say Canadian softwood is hurting the U.S. market.
“If we’re at a point where we’re paying the highest prices and there’s the best mill return that in many cases mills have ever seen, how can they sit back and say it’s because Canada’s dumping wood in the U.S.,” Chantaj said. “The mills have never had such high returns in regards to the cost of lumber.”
Rustja, vice president of trading for Weston Forest, also based in Ontario, Canada, said his company buys panels Swanson Group produces.
Weston Forest is a wholesale distributor of softwood, hardwood and panel products for Canada and the U.S.
Rustja said Canada has had a U.S. market share ranging between 28 and 32 percent over the last decade.
“Being about one-third of the market, the restriction of lumber with duties and taxes definitely has an impact on supply,” Rustja said.
Rustja said the issue being raised by the U.S. Lumber Coalition is less about Canadian subsidies but more about business practices.
“Whenever a trade case arises, there’s an anti-dumping duty, which in the short run makes paying for lumber more expensive, which is good for the U.S. producers,” Rustja said. “If you are a producer in the United States, it is in your financial interest to bring a trade case up because it will make the prices of lumber more expensive and return more profit to the mills.”
Rustja said he recognizes the issue is split depending on perspectives — Canadians tend to say their softwood isn’t hurting the U.S. market, while U.S. producers would disagree.
Steve Swanson said the tariffs have helped the U.S. producers, but there are other factors involved in the good market, including the shortage of logs in the Northwest and the high demand for wood products.
“We are running one of our mills at half capacity and the other sawmill at two-thirds capacity,” he said.
Swanson said British Columbia is also seeing a shortage of logs, due to high tree mortality rates during last summer’s wildfires and infestations of mountain pine beetles.
U.S. market is seeing good times, but log prices are also at a record high, which has less to do with the tariffs but more to do with the lack of supply, he said.
Rustja said though they may be on opposite sides of this particular issue, those involved in the North American lumber production industry interact with each other often. Next week, members of the Western Wood Products Association and the North American Wholesale Lumber Association are planning to meet for a summit in Austin, Texas, where Rustja said about 85 percent of the industry will be represented.
He said the softwood importing issue has been a topic of discussion during the conference for years, either in an official capacity with a speaker or just at the bars at the end of the day.
“This trade case has been one of biggest shocks to our industry over the last couple years and there’s been no bi-lateral agreement yet,” Rustja said. “But are we angry at each other? No, I’ll sit down and buy Steve a drink.”