Washington ? The government set stiff import duties on a popular type of Canadian lumber Friday, angering its largest trading partner and potentially setting the stage for higher U.S. new-home prices.

Canadian International Trade Minister Pierre Pettigrew called the duties “obscene” and said the Bush administration could not “find the nerve to confront its protectionist softwood lumber producers.”

American producers have contended that Canada’s trade practices overstimulate lumber production there, driving down prices and eventually costing jobs at mills in this country.

U.S. homebuilders, who oppose the duties, estimate they could add $1,500 to the cost of the average new home and lock about 450,000 people out of the housing market.

After a yearlong investigation, the Commerce Department determined that Canada subsidizes its industry by charging low fees to log public forests and allows its industry to illegally “dump” lumber in the United States at artificially low prices.