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U.S. sets import duties on Canadian lumber

The government set stiff import duties on a popular type of Canadian lumber Friday, angering its largest trading partner and potentially setting the stage for higher U.S. new-home prices.

Canadian International Trade Minister Pierre Pettigrew called the duties "obscene" and said the Bush administration could not "find the nerve to confront its protectionist softwood lumber producers."

American producers have contended that Canada's trade practices overstimulate lumber production there, driving down prices and eventually costing jobs at mills in this country.

U.S. homebuilders, who oppose the duties, estimate they could add $1,500 to the cost of the average new home and lock about 450,000 people out of the housing market.

After a yearlong investigation, the Commerce Department determined that Canada subsidizes its industry by charging low fees to log public forests and allows its industry to illegally "dump" lumber in the United States at artificially low prices.

The department set two duties totaling 29 percent for most Canadian lumber producers: a 19.3 percent duty to punish Canada for the subsidies and a second tariff averaging 9.7 percent for dumping.

The dumping duty varies by company and ranges from 15.8 percent for Weyerhaeuser to 2.3 percent for West Fraser. Lumber from Canada's four Maritime provinces was excluded from both duties.

The ruling involved softwood lumber. The United States imported $5.7-billion worth from Canada in 2001, about a third of the U.S. supply.

The duties came just over two weeks after President Bush sought to help the U.S. steel industry by imposing tariffs, though he exempted Canada in that order.