Mushroom Canada is going to fight a new tax on fresh mushroom exported to the United States.
The United States Department of Commerce’s has imposed a preliminary countervailing duty against fresh mushrooms from Canada.
The preliminary ruling means U.S. importers will have to post countervailing duty cash deposits beginning on the date the determination is published in the Federal Register, which is likely to be Monday May 18.
The preliminary rate is not final, and the case remains subject to further review by both the Commerce Department and the U.S. International Trade Commission.
“Commerce’s preliminary conclusion is deeply flawed,” said Ryan Koeslag, executive vice-[resident and chief executive officer of Mushrooms Canada.
“The overwhelming basis . . . appears to be mainstream agricultural tax treatment, including provincial sales tax exemptions available to farmers generally. Treating broad-based agricultural tax measures as unfair subsidies is contrary to common sense and unfairly penalizes Canadian mushroom growers for participating in programs available across the agricultural sector in any number of countries.”
Mushrooms Canada emphasized that the preliminary determination does not mean that Canadian growers have engaged in unfair trade.
Under U.S. trade law, a subsidy must meet specific legal requirements before it can be countervailed, including that the alleged benefit be limited to a specific enterprise, industry, or group.
Mushrooms Canada believes those requirements have not been met here.
“It is difficult to reconcile Commerce’s preliminary approach with the fact that comparable agricultural tax treatment exists in the United States,” Mr. Koeslag added. “Canadian mushroom growers are not receiving special treatment. They are operating under ordinary rules that apply to farmers.”
The Commerce Department still needs to issue a final anti-dumping and countervailing duty determinations and the U.S.
International Trade Commission must make a final injury determination.
If the Trade Commission finds that imports of fresh mushrooms from Canada are not causing material injury or threat of material injury to the U.S. industry, the interim duties will be terminated.
“Mushrooms Canada will continue to participate fully in the process and demonstrate that the allegations against our sector are unfounded,” Koeslag said.
“Canadian growers provide high-quality, responsibly produced mushrooms that support consumers, retailers, foodservice operators, and the broader North American market.”
Mushrooms Canada said “the mushroom sector in North America has grown through collaboration, cross-border supply relationships, and shared commitment to quality and food security.
“This case should not obscure the fact that Canadian and U.S. producers, workers, customers, and consumers all benefit when our markets remain connected and reliable,” Koeslag said.
