EU pushes construction firms to the brink with Russian timber levy

Forest

Brussels has been accused of driving building businesses across Europe to the brink of insolvency after imposing a levy on imports of Russian timber.

The anti-dumping duty - which adds a charge of as much as 15pc to Russian wood - risks piling more pressure on companies already reeling from chronic supply shortages and battling a surge in inflation, according to a letter signed by more than 100 companies.

Officials imposed the anti-dumping tariff following an investigation into a surge in cheap Russian timber exports, amid fears producers from the country were flooding the European Union market and pricing out domestic rivals.

But building companies said on Wednesday that the decision robs them of a vital source of cheap timber.

In a letter to the European Commission, the Birch Plywood Alliance, which represents importers and distributors of timber across 25 nations in the EU, said: "The imposition of anti-dumping measures is not in the [European] Union interest, in particular as they will exacerbate supply shortages, since Russia is the only viable solution for half of the EU’s demand, and disastrously affect EU importers and users in a context of skyrocketing prices."

Russian companies account for 70pc of global timber production, and global lumber prices have jumped to more than double historic levels in the wake of the pandemic.

Earlier this year, the European Construction Federation warned that surging materials costs were putting Brussels' plans for a post-Covid infrastructure spree at risk.

EU-based wood producers welcomed the decision to impose extra tariffs on Russian wood, saying it protected their market share.

The Woodstock consortium of producers said: "Anti-dumping duties constitute a crucial step towards offsetting the effects of sustained and continuous dumping practices by Russian producers, giving EU producers a chance to regain a sustainable playing field on the EU market – rather than in the long run be forced out of business.

Free trade advocates criticised the EU for imposing a levy, arguing that costs will be passed on to consumers as a result.

Matt Kilcoyne, director of the Institute for Free Trade, said: "The idea of the EU was to bring down trade barriers and to support consumers by lowering prices. Protectionist policies inevitably damage the economy and pass on costs to consumers".