Proposed tariff may lead to cost increases.Forest products companies such as Tembec are standing pat in the face of a proposed tariff of 19.3 per cent levied against the Canadian softwood industry by the United States Department of Commerce The United States Department of Commerce is the Cabinet department of the United States government concerned with promoting economic growth. It was originally created as the United States Department of Commerce and Labor on February 14, 1903. . "(The lumber dispute) is becoming almost a sport to them," says Martin Michaud, vice-president of Tembec's Northern Ontario Northern Ontario is the part of the province of Ontario which lies north of Lake Huron (including Georgian Bay), the French River and Lake Nipissing. Northern Ontario has a land area of 802,000 km² (310,000 mi²) and constitutes 87% of the land area of Ontario, although it division. "Even though they don't have a case, they keep trying and trying because their objective is really to create uncertainty in the market so prices go up." Tembec laid off 120 workers at its six sawmills across Northern Ontario in February, cutting back from three shifts to two, in the face of an uncertain and volatile North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market. Tembec, which employs 790 at its mills, exports about 50 per cent of its product to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Whether Americans will pay more for Canadian lumber, which is regarded as the best product for homebuilding, is not known, he adds. Michaud says the proposed tariff also opens the doors to off-shore replacement products such as plastic and steel from Europe, South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. to increase their U.S. marketshare. It is expected the United States Commerce Department's next step is to impose punitive duties against Canadian software producers for dumping lumber in the United States. If carried out, that will hurt Tembec's cash flow for reinvestment in its own mills. "If a customer doesn't pay the premium, it would mean we have to increase our cash costs by 20 per cent to ship anything to the U.S.," Michaud says. "There's just no way we can even think of that. It would paralyse par·a·lyse v. Chiefly British Variant of paralyze. paralyse or US -lyze Verb [-lysing, -lysed] or -lyzing, us completely." Canadian producers do have some American allies, for the first time, with consumer groups and large lumber retailers such as Home Depot much in favour of repealing any tariff or legislation that artificially raises the cost of building a home. Demand for Tembec products from American markets remains relatively soft until the United States Commerce Department delivers its final determination in October. |
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