In a statement, Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said that the duties are "punitive", and that the Canadian Government "will continue to vigorously defend our industry against protectionist trade measures".
USA lumber interests backed the decision for a tariff averaging 20.83 percent on Canadian lumber imports. But its demands - which range from requiring that more auto production be made in the U.S.to having more government contracts in the NAFTA bloc go to USA companies - will likely be unacceptable to the U.S.' two other NAFTA partners, Canada and Mexico.
"This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices", Ross said.
A previous softwood lumber agreement expired in 2015, although it was provisionally extended for a year to work out a new deal.
US Customs and Border Protection will now be required to collect cash deposits from importers of softwood lumber from Canada, based on the final rates.
"This administration must fully enforce America's trade laws, not just for the mills and workers in OR and across the country, but for the communities that depend on them", Wyden said.
If the decision announced Thursday is approved by the International Trade Commission in December, Canadian companies would have to pay an average 20 percent tariff on the value of softwood delivered to USA customers. "It shows the Commerce Department agrees with what we the lumber producers have been trying to tell them, that there was an export violation, and their government does subsidize their industry".
Jason Brochu, co-chair of the U.S. Lumber Coalition and president of Pleasant River Lumber Company, said U.S. lumber companies could now expand production to meet U.S. demand.
USA and Canadian officials have been working for months with industry representatives to come to an agreement to avoid the tariffs announced Thursday, which if permanently imposed will add a duty of around 20% or more, depending on the Canadian mill.
Canada may take legal action through dispute settlement mechanisms under the North American Free Trade Agreement and the World Trade Organization, but Freeland said officials continue to engage with their American counterparts about a negotiated settlement. It also determined that Canada is providing unfair subsidies to its producers at rates of 3.34 to 18.19 per cent.
"Home builders and home owners are already dealing with the monumental rebuilding efforts in the aftermath of the devastating hurricane season and California wildfires", said Granger MacDonald, chairman of the National Association of Home Builders, in a statement. The trade dispute has been an intermittent source of friction for years and was reignited in 2016 when the US lumber industry filed a petition asking for duties. "This tariff only adds to the burden by harming housing affordability and artificially boosting the price of lumber".
Last year, the United States imported about $5 billion worth of lumber of Canada. "These duties are a tax on the American middle-class families, too, whose homes, renovations and repairs will only be more expensive".