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At the beginning of this year, the abnormal increase in timber prices seriously harmed the interests of American builders. Therefore, the U.S. Department of Commerce made an administrative decision to reduce tariffs on Canadian timber imports into the United States by more than half. After the implementation of this administrative decision, the tariff on cork from Canada to the United States was reduced from 20% to 9%.

However, the U.S. Timber International Trade Investigation and Negotiation Commission has always held objections to the administrative decision of the U.S. Department of Commerce. After several rounds of court battles, the U.S. Court of International Trade ruled that the administrative order issued by the U.S. Department of Commerce exceeded its authority and issued an administrative decision. According to the Uruguay Round Agreement Act (URAA), the Ministry of Commerce only authorizes the Ministry of Commerce to issue regulations on the issued provisions of the URAA, and the URAA does not contain provisions that explicitly authorize accelerated review.

Therefore, it is expected that in November this year, the U.S. tariff on Canadian imports of cork will rise to about 20%. The figure below shows the restored tariff levels after the administrative order was revoked.

Although the current U.S. market timber prices are almost low, market stakeholders said that it may only take a few weeks for timber prices to rebound to a level where sawmills can make money again, and the impact of tariffs will be even more significant.

At present, the break-even price of spruce, pine and fir in the western United States is between US$525 and US$550. Taking into account the operation of tree felling and standing timber, it is expected that the break-even point of sawmills may rise to 550 by October. -US$575.