Trump to impose tariffs on Canadian softwood lumber
The Trump administration will slap new tariffs on softwood lumber entering the U.S. from Canada, a move sure to inflame a long-running trade dispute between the two countries. President Trump announced his decision Monday evening during a reception with conservative journalists, and a White House official confirmed it. The Commerce Department later said it would impose a “countervailing duty” of between 3 percent and 24 percent on Canadian lumber exporters.
U.S. lumber producers will be pleased by Trump’s decision; they have long alleged that Canadian lumber imports are unfairly subsidized because companies north of the border can source timber from government-owned land.
Canada has long denied that it subsidizes lumber, saying that producers must pay market rates for its wood. Softwood lumber is one of Canada’s largest exports and the U.S. takes in almost 80 percent of the supply.
New tariffs could hurt ordinary Americans by driving up the price of homes, critics say. Since the dissolution of the most recent U.S.-Canada lumber deal, wood prices have jumped about 20 percent.
The move, which comes close to Trump’s 100th day in office, is another example of his desire to take a tougher approach on trade.
Trump reportedly said he might impose an import tax on Canadian dairy in response to what he said was an “unfair” Canadian tax on certain U.S. milk products.
“What they’ve done to our dairy farm workers is a disgrace. It’s a disgrace,” Trump said last week, adding that he thinks the North American Free Trade Agreement is responsible for the dispute.
The softwood lumber standoff has lasted decades. The issue was revived after a mutual truce on trade litigation expired last year.
Former President Obama and Canadian Prime Minister Justin Trudeau agreed in June to finally resolve the issue, but the two nations failed to lock in a deal before that agreement expired in October.
A group representing U.S. lumber companies filed a petition with the Commerce Department in November 2016 asking for punitive tariffs on Canadian softwood lumber.
Commerce is expected to levy a second anti-dumping tax on June 23. The two tariffs will be combined, and the Canadian government will have to wait until next year to appeal.
Ahead of the expiration of last year’s agreement, top Canadian officials said they were eager to forge a new softwood lumber deal, meeting regularly with U.S. government and U.S. Lumber Coalition officials.
But they said talks eventually broke down with the push for more protectionist measures by the U.S. Lumber Coalition.
Sen. Ron Wyden (D-Ore.), the ranking member of the Senate Finance Committee, applauded the Commerce Department’s decision. “Unfairly traded softwood lumber from Canada has for decades hurt mill towns and American millworkers in Oregon and across the country,” Wyden said. “Today’s announcement sends the message that help is on the way,” he said.