OROVILLE, Wash. — A 20-percent U.S. tariff on softwood lumber imported from Canada will cause a drop in trade and a pause in Canadian lumber planning, says the manager of a lumber re-manufacturing company in this U.S.-Canadian border town.
“We were looking to expand and now those decisions are on hold,” said Will Verner, operations manager of Oroville Reman & Reload which is part of Gorman Brothers Lumber, West Bank, B.C.
Oroville Reman & Reload and other Canadian lumber companies, some also looking to expand U.S. operations, will begin looking at markets other than the U.S., Verner said.
The company finished 73 million board feet of lumber in 2016, making it a large company, and plans to be at that level again this year despite the tariff, Verner said.
President Donald Trump and the U.S. Commerce Department announced, April 24, that tariffs ranging from 3 percent to 24 percent, with many at 19.88 percent, will be levied on softwood lumber because of subsidies at those levels by the Canadian government creating alleged unfair competition in the U.S.
The move followed a change in Canadian milk pricing that hurts milk producers in Wisconsin and other states.
The Canadian government has denied unfair competition. The two sides have long-running trade disputes and are preparing, with Mexico, to renegotiate the North American Free Trade Agreement.
“If NAFTA were functioning properly, you wouldn’t be having these kinds of very prickly, very unfortunate developments back to back,” U.S. Commerce Secretary Wilbur Ross told reporters, April 25, referring to lumber and milk disputes.
Oroville Reman & Reload is a major employer in Oroville with 115 employees. It was planning to hire more and expand production but now will wait to see how the dispute plays out, Verner said. It could be settled in six months, he said.
The company was started as Oroville Bin & Pallet in the early 1960s by brothers Ross and John Gorman to lower their tax bite on bins and pallets they had been making in Canada and selling in the U.S.
By the early 2000s, the company had evolved into importing rough lumber from Canada and re-manufacturing it and reloading it by truck and rail for sales in the U.S. and elsewhere.
Most production is 1-by-2-inch dimension through 1-by-12 inches, Verner said. Some of the company’s products are milled at Zosel Lumber Co. also in Oroville, he said.
The new tariff will be less of a hit on rough lumber than finished lumber because rough lumber is of lesser value, he said.