Canada mulls retaliation in softwood dispute
• The Canadian government is threatening multiple trade actions against the U. S. in retaliation for duties on softwood lumber, warning that several American industries could be targeted in the event of a protracted trade dispute.
A first salvo came from Prime Minister Justin Trudeau, who in a letter Friday informed B. C. Premier Christy Clark that he’s seriously considering her request for a ban on exports of U. S. thermal coal and that federal trade officials are examining it.
A broader threat is also in the works, said two government sources. It involves possible duties against different industries in Oregon, which is the home state of a Democratic senator — Ron Wyden — who has been a hardliner on the lumber dispute.
That s t ate’s plywood, flooring, wood chips, packaging material and wine are among the potential targets as the Canadian government has launched a search for evidence of illegal subsidies to businesses in that state.
The sources insisted these threats are not indicative of any escalating hostility to President Donald Trump and are simply a one- off measure — specific to one dispute over softwood lumber, and one state, and one Democratic senator.
There’s an easy solution: a long- term softwood- lumber deal would put the issue to rest, one source said.
“We hope we don’t have to act,” said the source, speaking on condition of anonymity in order to discuss matters not yet made public.
“We hope this dispute can be resolved.”
The course of action being reviewed by the Canadian government is similar to the process used in the U. S. that slapped a 20- per- cent duty on lumber. It involves a request to the Canada Border Services Agency to study illegal subsidies in Oregon, a process that would take several months.
The government says it has identified nine programs in Oregon that assist businesses, primarily in lumber.
They include: the Oregon Underproductive Forestland Tax Credit, the Oregon Forest Resource Trust, the Oregon Tree Farm Program, the Pacific Forest Trust, property tax exemptions for standing timber, a small winery tax exemption program and other tax credits.
“It’s a real thing. Our officials have already been looking at this,” said one government official familiar with the plan. “Wyden has been a chief proponent for years of the baseless and unfounded claims against the Canadian softwood lumber industry.”
These threats arrive in a climate of escalating trade hostilities. Trump’s recent digs at Canada have drawn reactions north of the border. The strongest reactions have come from provincial governments.
Ontario is r eportedly examining targets for retaliation in the event of any new Buy American provisions. And B.C.’s premier has turned a threat of retaliation into the centrepiece of her current election campaign.
But a former diplomat urged caution.
Clark’s threat to ban or tax U. S. thermal coal would be against Canada’s own interests, said Colin Robertson, a former member of Canada’s NAFTA negotiating team, now vice- president at the Canadian Global Affairs Institute.
“You don’t want to stop the Americans using our ports,” Robertson said in an interview. Ports in Seattle and Portland would be quite happy to snap up that business at the expense of Canadian jobs, Robertson added.