Home Builders Brace for Canadian Softwood Lumber Tariff Hit

Canada's forest industry sustains hundreds of thousands of good middle-class jobs in communities across the country says Natural Resources Minister Jim Carr

The recent imposition of tariffs by the United States on Canadian lumber do not indicate the beginning of a trade war between the two countries, US Secretary of Commerce Wilbur Ross said in an interview on Tuesday.

"This is really a slap in the face of Canada", says Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics.

The council said arguments that claim Alberta's timber pricing system is unfair don't take into account "many costs, including reforestation, land management, road building, environmental monitoring and site reclamation that Canadian producers must pay".

Trump's newest Cabinet addition, Agriculture Secretary Sonny Perdue, joined the roundtable discussion.

The President also lashed Canada last week for its dairy exports hurting the U.S. milk and cheese industry in the neighbouring USA state of Wisconsin. Those tariffs are high - 299% on butter, 245% on cheeses such as parmesan, 216% on powdered buttermilk and 295% on cream.

"Today's ruling confirms that Canadian lumber mills are subsidized by their government and benefit from timber pricing policies and other subsidies which harm USA manufacturers and workers".

What's different now, is the timing.

And he agreed when asked whether the disputes with Canada illustrate the need to renegotiate the North American Free Trade Agreement (NAFTA) sooner rather than later. The tariffs are based on the amount of Canada's subsidies.

"Unlike many of Trump's formal trade policy announcements, these moves could have an nearly immediate impact".

In the past week the Trump administration has also announced a sweeping investigation into whether the importation of foreign steel jeopardises U.S. national security and would justify imposing tariffs against a broad range of countries. "It's quite possible this would have happened in any other administration". The current Commerce Department review was started under the Obama administration, after a truce negotiated under the George W. Bush administration expired. In softwood lumber, the countries have had a once-a-decade cycle of tariffs, trade litigation, and ultimately settlements.

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"The biggest part of most home prices, in any event, is the land value, not the lumber value", Ross explained.

Trade groups for US dairy farmers have complained that Canada is incentivizing its processors to use local supplies - and in the process blocking American dairy exports.

"We are pleased with this initial outcome and are looking forward to the (next, anti-dumping) duties expected to be announced June 23", said Zoltan van Heyningen of the U.S. Lumber Coalition. The fact that Nafta panels have previously rejected USA arguments was also cited Monday in a statement from the B.C. Lumber Trade Council, which represents companies including Canfor, West Fraser and Intefor Corp.

Despite the agreement, US lumber firms continued to allege that their Canadian counterparts had an unfair advantage which allowed them to sell their lumber in the USA market at prices American firms couldn't sell at.

Canadian firms immediately denounced the decision.

With local mills and families facing significant challenges, demands are growing on Ottawa to tackle a trade dispute.

What comes next on softwood is a study of separate anti-dumping duties, followed by a final verdict by the U.S. Commerce Department as early as September 7, and then one of three possible outcomes: a negotiated agreement, a surprise retreat from the U.S. government, or a potential years-long court battle.

"Standing up for Canada's interests is what my job is, whether it's softwood or software", Trudeau responded to applause. It alone accounts for 8% of Canada's exports, according to Panjiva, a firm that tracks global trade data.

The company employs 300 workers at its spruce and pine sawmills in Dover-Foxcroft, Jackman, Hancock and Sanford.

Nonay added, Canada imports far more dairy from the USA than we export to them. Canadian dairy farmers complained about the cheap imports coming across the border.

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