Published: Sat, April 29, 2017
Economy | By Melissa Porter

Trump, Trudeau talk about trade disputes

Earlier this week, the US announced that it would impose a tariff of about 20 percent on softwood lumber imported from Canada, a move Trump characterized as his "tough on trade" presidential style.

President Donald Trump says Canada has "outsmarted" the USA for a long time but his administration is "not going to put up with it". For all other Canadian lumber companies, there's a almost 20% duty imposed on exports to the U.S.

"That's a really important message to take to the United States. they need us and they ought to treat us accordingly". Trump has directed nearly all of his NAFTA criticism at Mexico, which makes this decision even more surprising.

The highest-ranking Texas Republican in Congress, U.S. Senate Majority Whip John Cornyn, encouraged caution.

Canada's best course of action, however, won't become clear until after it receives the reasons for the US decision.

Trudeau said he told the president that the U.S. Commerce Department levelled "baseless allegations" when it imposed new, unfair duties on Canadian softwood. "We do believe that a negotiated deal is achievable".

The government is also reaching out to a number of other countries including China, South Korea and the promote Canadian softwood and diversify the Canadian export market. Trudeau criticized "baseless allegations" from the USA on softwood lumber and pledged to "vigorously defend" Canadian interests, a statement from his office said.

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.

Those tariffs are high, but not as high as the astronomical ones Canada imposes on dairy imports to protect its domestic market from the USA glut.

Last week, Trump also called Canada's dairy protections "unfair".

Mr Trump is a long-term critic of the North American Free Trade Agreement, but so far he has directed most of his concerns toward US/Mexico trade relations.

Softwood lumber is used primarily for home building. "It's hard to say how much, but with interest rates going up...between that and these costs going up, you're going to knock a lot of people out of the market".

Canada has the world's third-largest forest canopy, and is the largest producer of softwood, the bulk of which goes to the United States. "We're already in a housing affordability crisis and a steep increase like this only makes the situation worse". The company here that had processed the milk for cheese-makers in Canada says it will no longer do so as of May 1. "Because Canada is the largest US trading partner, it's natural that a Canadian trade issue would be top of mind".

"We are going to engage respectfully but firmly with the USA to demonstrate... the scope of integration of our economies, " Trudeau said in response.

"It's my hope that the Trump administration, despite some of the rhetoric that we've seen, because they have been squarely focused on American jobs and growing the economy, will recognize that choking off the supply of Canadian softwood is only going to kill jobs".

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