US customs upholds finding over Canadian Cedar routed through New Zealand

Published on September 21, 2026 Time: loading...

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U.S. Customs and Border Protection (CBP) has upheld its determination that a New Hampshire wholesaler evaded U.S. duties on Canadian softwood lumber routed through New Zealand.

The decision means the importer, Coastal Forest Products, will continue making cash deposits on the timber covered by the investigation.

The finding was affirmed by CBP’s Office of Regulations and Rulings on Friday, September 11, according to the US Lumber Coalition. The organisation represents American softwood producers and brought the case against the importer.

The decision highlights the continuing scrutiny of timber shipments that move through third countries before reaching the U.S. market.

Customs Investigation Examined New Zealand Processing

The investigation focused on lumber shipped from a New Zealand supplier to Coastal Forest Products.

Customs officers travelled to New Zealand in January to examine the supplier’s operations.

They spent four days at the business.

Officials visited Herman Pacific’s main office on January 22, 23 and 28. They also inspected the company’s production plant on January 27.

During the visits, officers interviewed company representatives, toured the facilities and reviewed original business records.

The investigation identified 11 operational steps at the plant.

CBP concluded that the processing represented limited finishing work rather than a transformation that changed the timber’s origin.

The determination states, “In fact, most of these steps do not physically alter the wood at all apart from drying”.

Herman Pacific, trading as Hermpac, had described itself as a “secondary manufacturer”. Its responses characterised its activities as “downstream processing including resawing and optimization”.

The company uses Canadian-origin western red cedar for the timber supplied to Coastal, according to the determination.

Canadian Origin Remained Central to the Case

The origin of the timber was a key issue in the enforcement proceeding.

Coastal reported the wood as a New Zealand product when it entered the United States. However, the importer identified Canada as the country of origin on its U.S. Department of Agriculture plant declaration forms.

The importer had also disclosed in August 2025 that Hermpac told it the cedar entering the United States was first “imported to New Zealand from Canada”.

The record identifies Western Forest Products as the Canadian company involved.

Trade data presented by the party that filed the allegation showed Hermpac importing western red cedar into New Zealand from the British Columbia producer.

Coastal’s entries therefore take Western Forest Products’ rate under the applicable orders unless the record establishes a different supplier.

The determination applies to Coastal as the importer.

No evasion finding was made against Western Forest Products or Hermpac.

Antidumping and Countervailing Orders Apply

The timber involved falls under antidumping order A-122-857 and countervailing duty order C-122-858.

Both orders concern Canadian softwood lumber and were published by Washington in January 2018.

CBP officers found substantial evidence that Coastal had transshipped lumber covered by those orders.

Victoria Cho, director of the enforcement operations division at CBP’s Trade Remedy Law Enforcement Directorate, signed the determination on Monday, May 4.

The determination covers entries made from June 26, 2024 onwards.

For companies operating in the North American lumber trade, the case illustrates the importance of origin documentation and processing records when products move through an intermediary country.

Substantial Transformation Argument Rejected

Coastal argued that the cedar had undergone “substantial transformation” in New Zealand.

The company also referred to a scope exclusion covering wood processed only through kiln drying, planing or sanding.

CBP rejected that position under the Enforce and Protect Act, or EAPA.

The determination notes that the relevant orders cover softwood lumber “whether or not planed” and “whether or not sanded”.

The finding means that the processing undertaken in New Zealand did not remove the Canadian lumber from the scope of the applicable trade orders.

That distinction is important for importers and timber processors.

Processing in another country does not automatically establish a new country of origin for trade-remedy purposes.

The specific nature of the processing and the applicable orders remain relevant.

Industry Response

The US Lumber Coalition welcomed the CBP decision.

“CBP’s strong enforcement of U.S. trade laws helps protect American workers and businesses,” Zoltan van Heyningen said.

The coalition’s executive director also said the organisation would continue monitoring trade data for transshipment.

The case reflects the broader attention being given to supply chains involving Canadian softwood products and third-country processing.

For U.S. lumber businesses, trade enforcement can directly affect competitive conditions in the domestic market.

For importers, the decision reinforces the importance of maintaining accurate sourcing information and documentation throughout the supply chain.

Duties and Liquidation Remain Suspended

The financial consequences of the determination will continue while CBP implements its findings.

Liquidation remains suspended for every entry covered by the investigation.

Entries already held under interim measures are being reclassified so that the applicable duties attach.

CBP will also review Coastal’s continuous bonds.

Both sides have 30 business days from the review to seek a challenge before the U.S. Court of International Trade.

CBP has also stated that its actions do not prevent “additional enforcement actions or penalties”.

For the North American wood products industry, the case demonstrates how closely customs authorities can examine processing arrangements, country-of-origin declarations and trade-remedy obligations.

The ruling also provides a clear reminder that a “Made in NZ” description does not, by itself, determine the origin of Canadian cedar under U.S. trade rules.