Trump slaps tariff on Canadian softwood lumber

“It has been a bad week for U.S”.

Then came a statement that said U.S. Customs will begin collecting cash deposits from Canadian logging companies because they receive a range of subsidies – majority around 20 per cent.

It will all play out amid the backdrop of a bigger trade file: the renegotiation of the North American Free Trade Agreement. Trump has directed nearly all of his NAFTA criticism at Mexico, which makes this decision even more surprising.

Trump tweeted Tuesday that Canada is making life “very difficult” for American dairy farmers and that the government “will not stand” for it.

Lumber accounted for only 1.2 per cent of all exports and less than 0.3 per cent of all Canadian jobs previous year. While that’s lower than West Fraser Timber Co.’s 24.12 percent and below the 19.88 percent average, the company ships about 65 percent of its lumber to the US and doesn’t have access to Asia or a footprint in the USA south to offset the fee like some Western Canadian producers, Kursman said.

Shares of Western-based Canfor (TSX:CFP) rose 9.46 per cent, West Fraser (TSX:WFT) 8.5 per cent, Interfor (TSX:IFP) two per cent and Norbord (TSX:OSB) 1.3 per cent.

The duties were imposed to create a level playing field for American lumber companies. Much of Canadian lumber is grown on public lands, while most USA timber is on private property.

He told the news agency that anti-subsidy duties would average 20% and would effect $5 billion worth of softwood lumber imports from Canada.

For Pleasant River Lumber, Brochu said that the announcement of countervailing duties made the timing right for an expansion. Ross said during a press conference Tuesday that the tariffs are effective immediately.

“The fact is, Canadian lumber imports don’t pose a threat to the USA lumber industry”.

Jiang pointed to former Conservative prime minister Stephen Harper’s decision to try to find more Chinese customers for Canadian oil after Barack Obama mothballed a decision on the proposed Keystone XL pipeline, which would have carried oilsands bitumen to the Gulf of Mexico. “In 2015, 59 per cent of British Columbia’s softwood lumber exports went to the US – down from 82 per cent in 2001 thanks to increased exports to overseas markets including China and India”. However, different actors would be pleased to add provisions on one or the other.

“The government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty”, Natural Resources Minister Jim Carr and Foreign Affairs Minister Chrystia Freeland said in a statement.

“We believe that a fair softwood lumber agreement that provides good paying jobs, supports local communities and produces sustainable forests is possible”.

In fact, it goes back decades.

“Standing up for Canada’s interests is what my job is, whether it’s softwood or software”, Trudeau responded to applause.

On Tuesday, International Trade Minister Francois-Philippe Champagne was in Beijing with a coterie of Canadian softwood lumber industry players in his entourage. “About 95 per cent of our business is done outside Canada”, Litt said, adding they are anxious how the policies could affect their company.

“This is not our idea of a properly functioning Free Trade Agreement”, he concluded.

The president spoke at a U.S. Capitol ceremony hosted by the U.S. Holocaust Memorial Museum to mark the unveiling of its new conservation and research center. Well aware of the latest escalation in the dispute, he said his visit to China would help find much-needed new markets for Canadian wood.

The dairy dispute is fairly wonky, though undoubtedly important to farmers on both sides of the border. Canada has long taxed US diary products.

Canada has long maintained a high tariffs on most dairy imports. While there are a lot of potentially system-destroying trade actions from the Trump administration to worry about, this one is just the usual, routine kind of trade remedy action.