Canada has escalated its challenge to the US antidumping methodology used on softwood lumber, taking a dispute over Commerce Department price tests to the US Court of Appeals for the Federal Circuit.<\/p>\n
The case stems from the fourth administrative review of Canadian softwood lumber, covering shipments made in 2021. Canfor and West Fraser were the two mandatory respondents, with amended antidumping rates of 5.25% and 7.06%, respectively. The rate for non-selected companies was set at 6.26%. Combined with countervailing duties, the total rates were 6.61% for Canfor and 9.25% for<\/p>\n
The appeal follows a July 27 ruling by the US Court of International Trade that upheld Commerce\u2019s revised differential pricing methodology. The court sustained Commerce\u2019s remand determination after the department abandoned its previous Cohen\u2019s d statistical test and replaced it with a new three-stage approach.<\/p>\n
The dispute now centres on a 2% price band<\/strong><\/p>\n Commerce\u2019s new price-difference test compares the weighted-average net price charged to a particular customer, region or time period with the weighted-average price charged elsewhere.<\/p>\n If the price falls outside a band of plus or minus 2%, Commerce treats the difference as significant. The department then calculates how much of the exporter\u2019s US sales pass that test and decides whether an alternative dumping calculation should be used.<\/p>\n For the 2021 lumber review, Commerce found that 99.40% of the value of Canfor\u2019s US sales and 99.82% of West Fraser\u2019s sales passed the price-difference test. It therefore concluded that the companies showed a pattern of prices that differed significantly across customers, regions or periods.<\/p>\n That finding allowed Commerce to use an average-to-transaction calculation rather than relying only on the standard average-to-average method.<\/p>\n The resulting dumping margins were 5.25% for Canfor and 7.06% for West Fraser.<\/p>\n Canadian producers say the test ignores how lumber prices move<\/strong><\/p>\n The Canadian side argues that a fixed 2% threshold is too blunt for a commodity market where prices move rapidly between regions, customers and periods.<\/p>\n Their argument is that normal price volatility can produce differences greater than 2% without showing targeted dumping. In court filings, the Canadian parties said Commerce\u2019s interpretation of what constitutes a significant price difference fails to take sufficient account of market context.<\/p>\n That is particularly relevant in softwood lumber, where prices can move sharply with construction demand, inventories, freight, species, dimensions and regional market conditions.<\/p>\n Commerce has defended the test by arguing that the underlying data still vary from case to case because the 2% band is applied to each respondent\u2019s own pricing patterns. It also noted that 2% thresholds are already used elsewhere in US trade law. Commerce had to replace its previous statistical test<\/strong><\/p>\n The 2% test did not appear in isolation. Commerce had originally used the Cohen\u2019s d test as the first step in its differential pricing analysis. That methodology was later rejected by the Federal Circuit in the Marmen case, forcing Commerce to redesign the calculation.<\/p>\n The department responded by replacing Cohen\u2019s d with the current price-difference test, while keeping the remaining stages of its differential pricing framework.<\/p>\n That history makes the latest appeal particularly important. The Federal Circuit is now being asked to review the replacement methodology introduced after its earlier ruling against Commerce.<\/p>\n The Canadian industry is also pointing to Commerce\u2019s past treatment of 2% thresholds in other antidumping cases. The department used a different 2% methodology in an earlier steel nails case but later abandoned that approach. Commerce argues that the earlier test was materially different and that the only common feature was the numerical threshold itself.<\/p>\n The rates under appeal are now well below current duty levels<\/strong><\/p>\n The dispute concerns lumber shipped in 2021, but Canadian producers now face substantially higher US trade barriers. US softwood lumber imports are also now subject to a separate 10% Section 232 tariff, introduced in October 2025, on top of antidumping and countervailing duties.<\/p>\n The legal fight over methodology therefore comes at a time when the overall cost of shipping Canadian lumber into the US has risen materially.<\/p>","protected":false},"excerpt":{"rendered":" Canada has escalated its challenge to the US antidumping methodology used on softwood lumber, taking a dispute over Commerce Department price tests to the US Court of Appeals for the Federal Circuit.<\/p>","protected":false},"author":1,"featured_media":100137,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-100136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n
\nThe Court of International Trade accepted that reasoning and found Commerce\u2019s methodology reasonable.<\/p>\n
\nThe fourth-review rates being litigated \u2014 5.25% for Canfor and 7.06% for West Fraser on the antidumping side \u2014 are much lower than the combined duty levels seen in more recent administrative reviews.<\/p>\n