Canadian lumber companies brace for United States import tariffs

British Columbia’s lumber industry is likely to dominate the election campaign today, following an announcement by the Trump administration that it will impose a tariff of about 20 per cent on Canadian softwood imports.

“Last Monday it became apparent that Canada intends to effective;y cut off the last dairy products being exported from the United States”, Ross said.

“What we are doing is dealing with another bad act on the part of the Canadians”, Ross said.

On net, Canadian lumber and milk exports to the USA are a tiny fraction of the economy but it’s a big change in tone from the U.S. government towards it’s northern neighbor and that could spell big problems for Canada.

When anti-dumping duties are announced June 23, total duties are expected to be 30 to 35 per cent.

The so-called countervailing duties, which counter what the US considers Canadian subsidies, came in below some analyst expectations.

In an opening salvo against American trading partners who dump their products in the U.S. at unfairly subsidized prices, the Trump administration is considering slapping a 20% tariff on Candian softwood.

The Canadian government is expected to respond to the lumber tariffs by directing further aid to its newly embattled exporters, while contesting the duties’ legality in court.

Ontario is continuing its support for the province’s forestry sector, naming Jim Peterson as its chief negotiator to represent Ontario’s interests in the ongoing softwood lumber dispute between Canada and the United States.

Canada maintains a high tariff on imported dairy products, which dissuades American dairy farmers from selling many of their products in the country. “It’s a disgrace”, Trump said.

“The Government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty”.

Moreau said one way Canada could get out of the dispute is to add supply management in the dairy industry to future talks on softwood and cross-border trade. Softwood lumber is used mainly for home building.

The ruling is the latest salvo in a decades-long battle between Canadian and American lumber producers.

USA lumber producers have long accused Canada of subsidizing its industry, something it has always denied.

Council President Susan Yurkovich says that American demand for lumber exceeds what the USA industry can produce and that Canadian imports don’t pose a threat to US lumber producers.

Chad Bown, a senior fellow at the Peterson Institute for International Economics, predicted that the dispute would not escalate into something much bigger.

“Any two countries are going to have issues that will be irritants to the relationship”.

The Canadian loonie was already falling versus the USA dollar in overnight trading.

The average losses from housing shares are small because often times, a jump in lumber prices is because of increasing housing demand.