US claims jobs are threatened

"The US International Trade Commission has made affirmative threat determinations in connection with its final phase countervailing duty and anti-dumping investigations concerning softwood lumber from Canada," the US ITC said in a statement.

Canada denies it illegally subsidises domestic forestry operations, and sells timber in the US below market value.

Canada is expected to appeal to North American trade group Nafta and to the World Trade Organisation over the tariffs.

Counter-claims

Despite supporting the US industry's perceived threat, the ITC rejected claims that they had already been injured by the Canadian imports.

The Coalition for Fair Lumber Imports, which represents US timber firms and landholders, argued the imports had cost nearly 10,000 jobs and caused more than 100 saw mills to close over the past three years.

Canada claims the US is trying to protect a less competitive industry by controlling the amount of wood crossing the border, breaching the countries' free-trade relationship.

The US Commerce Department must now decide on when cash deposits for the duties will start to be collected.

The ITC vote ends a year-long investigation into the $6bn worth of imports of timber used by the building industry.

The timber dispute, coming after recent US tariffs on foreign steel, has heightened concerns of the Bush administration's commitment to free trade.