All Shakes and Shingles Exempt From Softwood Lumber AD/CV Duties, Not Certain Grades, Commerce Says

All cedar shakes and shingles are exempt from antidumping and countervailing duties on softwood lumber from Canada (A-122-857/C-122-858), not just certain categories, the Commerce Department said in a March 12 scope ruling. Despite circumvention concerns from domestic lumber producers, Commerce found no justification to apply the court-ordered exemption to some high-grade cedar shakes and shingles but not to lower grade products.

The government of Canada had requested the scope ruling. It said that, since Commerce exempted cedar shakes and shingles from softwood lumber duties in 2020 following a 2019 decision from the Court of International Trade (see 1911140048 and 2004210050), the agency has issued liquidation instructions limiting the exemption to specific grades of cedar shakes and shingles exported only by members of the Shake and Shingle Alliance. The SSA had originally requested the 2018 scope ruling on cedar shakes and shingles that would eventually be overturned at CIT (see 1810110040).

The Committee Overseeing Action for Lumber International Trade Investigations or Negotiations, petitioner in the original softwood lumber investigations, said the exemption should be limited. It said Commerce’s revised 2020 scope ruling set an exemption for only four categories: (a) Western red cedar/Alaskan yellow cedar shingles, Grades 01, 02, and 03; (b) WRC tapersplit and handsplit-and-resawn shakes Grade 01; (c) WRC tapersawn shakes Grades 01, 02 and 03; and (d) Eastern white cedar shingles Grades A, B and C.

The coalition said extending the exemption to all cedar shakes and shingles would increase evasion concerns, because low-grade cedar shakes and shingles are indistinguishable from wood shims. The similarities between wood shims and low-grade cedar shakes and shingles could affect CBP’s ability to administer the softwood lumber orders, it said.

Applying the same logic it applied in its 2020 scope ruling, Commerce found that the newly created exemption goes for all cedar shakes and shingles, not just the four grades suggested by the petitioner. First, all cedar shakes and shingles were exempt from previous iterations of softwood lumber duties. Second, the coalition’s petition does not distinguish high- and low-grade cedar shakes and shingles, and appears to countenance an exemption for all.

“With respect to the petitioner’s concerns of circumvention and evasion, Commerce finds that the petitioner’s claim is speculative and that there is no record evidence that companies would attempt to circumvent the Orders by importing a wood shim as a [cedar shake or shingle],” Commerce said. “Additionally, given that [cedar shakes and shingles] and wood shims are classified under two distinct HTSUS subheadings ([cedar shakes and shingles] are classified under HTSUS 4418.50.00, which is not listed in the scope, whereas wood shims are classified under HTSUS 4421.99.97.80, which is listed in the scope), we do not believe that record evidence reflects that CBP would have significant difficulty discerning wood shims and [cedar shakes and shingles].”

Email ITTNews@warren-news.com for a copy of this scope ruling.