Small, medium sized softwood companies hit hardest by U.S. penalties

The U.S. Commerce Department said it would impose countervailing duties on Canadian softwood lumber of between 3 per cent and 24 per cent.

A spokesperson for the White House, however, claimed Mr Trump and Mr Trudeau had a "a very amicable call", without giving further details. The step escalates an economic battle among neighboring countries that normally have one of the friendliest global relationships in the world.

The Trump administration's decision to slap tariffs on lumber imported from Canada should serve as a warning to its partners that the planning stricter enforcement of trade laws, Secretary of Commerce Wilbur Ross said.

"This new trade action is driven by the same protectionist lumber lobby in the USA whose sole goal is to create artificial supply constraints on lumber and drive prices up for their benefit, at the expense of American consumers", said Susan Yurkovich, B.C. Lumber Trade Council president. But Obama's USA trade representative, Michael Froman, now at the Council on Foreign Relations, says the Canadians chose to gamble on the new administration.

Colbert had an idea for how the two countries could ease tensions.

"It's not a question of President Trump messing with the Canadians". Having a good constructive working relationship allows us to work through those irritants.

Trudeau's office released a 213-word statement after the call, saying the prime minister "refuted baseless claims" about Canada's softwood lumber industry and rejected the decision to impose "unfair duties".

Pro: The U.S. Lumber industry says enforcing fair trade laws and leveling the playing field could increase the domestic industry's employment.

The US President had taken to Twitter early Monday morning to criticise Canada for making "business for our dairy farmers in Wisconsin and other border states very hard. People don't realise Canada has been very rough on the United States".

Earlier in the day, Trump accused Canada of making business for American dairy farmers in Wisconsin and other border states very hard. Despite remarks from the president and his Commerce secretary, neither lumber nor dairy are actually part of the current NAFTA.

"When it comes to defending Canada's economic interests, we're going to play hard", Chrystia Freeland told CNN Tuesday.

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.

  • Leroy Wright