New home buyers will pay for that new Canadian lumber tariff

Canada's foreign affairs minister is confident Canada and the USA can land a settlement on the softwood lumber trade war, after the Trump administration placed big, new tariffs on our lumber exports.

On Tuesday a US-Canada trade dispute intensified as Justin Trudeau and Donald Trump clashed over softwood lumber and dairy tariffs.

According to the White House, Canada has been subsidizing its softwood lumber industry thereby putting the industry in Wisconsin and the upper Midwest at a competitive disadvantage. The step escalates an economic battle among neighboring countries that normally have one of the friendliest global relationships in the world.

U.S. Commerce Department officials say it's been a tough week for trade relations with Canada.

That trade skirmish helped promote the idea of a broader North American Free Trade Agreement, which was signed by President George H.W. Bush in 1992 and took effect in 1994.

His appointment comes immediately after the USA was preparing to impose countervailing duties on Canadian lumber exporters that could range between three and 24 per cent, and could impact some of Canada's biggest producers, including Resolute Forest Products.

The two warned that the action would create a negative effect on families in the USA who must now pay more to have their homes built or renovated. "But they've outsmarted our politicians for many years, and you people understand that", he said.

Canada has signaled that it is open to renegotiation, with Prime Minister Justin Trudeau vowing to work closely with the new USA president on the trade deal.

The US lumber industry has argued for decades that because most Canadian timber is harvested on Crown lands, and the way provincial governments manage and set prices results in cheaper lumber. Last year Canada exported $5.7 billion (nominal) in softwood, and for the year Canada had a trade surplus of $5.5 billion for this category.

He further said that the sell of dairy products were not allowed from Wisconsin, New York and other border states to Canada.

He added: "Any two countries are going to have issues that will be irritants to the relationship".

Freeland said she had had long conversations with Ross on Sunday and Monday about lumber. "We will only accept an agreement with the United States that's good and that is fair for BC workers". Despite remarks from the president and his cabinet secretary, neither lumber nor dairy are actually part of the current NAFTA.

  • Leroy Wright