Although the United States has reduced the tariffs levied on Canadian lumber due to the WTO’s rule, Canadian lumber companies still face relatively high tariffs. Recently, Canadian timber and plywood giant Weston Forest announced that the company has been acquired by the US company Watermill Group.
Weston Forest, established in 1953, is currently an important raw material supplier in the industrial and construction industries, and its main markets are Canada and the United States.
Steve Rhone, chairman of Weston Forest, said: “For us, this is a historic event. I believe that Watermill Group’s advantages in strategic and financial areas will give the company even greater help.”
Watermill Goup said that Weston Forest’s performance is good, and the acquisition of this timber company is expected to greatly enhance the overall strength of Watermill Goup.
The outside world generally believes that this acquisition is of great benefit to both parties. Although Weston Forest has been deeply involved in the wood and plywood industry for many years, it has been restricted by its Canadian identity. It has been sanctioned by the United States in repeated lumber disputes between the US and Canada, thus affecting the company’s performance.
In order to solve this problem, Weston Forest tried to purchase forest land and sawmills in the United States, and supply the American market after processing. But this plan did not completely eliminate the impact of tariffs.
Weston Forest still has a large area of forest land in Canada, and its log and plywood market has a larger share in the United States. And Canada’s natural advantages mean that the logs and plywood produced in Canada are more cost-effective. For Weston Forest, it is not a cost-effective thing to abandon the Canadian origin and locate in the US.
Weston Forest was acquired by an American company and changed its identity to the United States. To a certain extent, it can alleviate the hostility of the American timber industry towards Weston Forest.
For the Canadian timber industry, although the United States has reduced the tax rate levied on Canadian lumber due to the WTO’s rule, Canadian lumber companies still face relatively high tax rates.
If Canadian lumber companies cannot further reduce the hostility of Americans for the time being, it is a good way to get more Canadian lumber into the United States by being acquired by American companies . At least, putting on the coat of the United States and importing wood from Canada may not be so dazzling in the eyes of Americans.
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