Canada weighing multiple softwood actions

Threats not against Trump, sources say

The Canadian government is threatening multiple trade actions against the United States 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 who has been a hardliner on the lumber dispute.

That state’s plywood, flooring, wood chips, packaging material and wine are among the targets as Canadian officials have 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 longterm softwood-lumber deal would put the issue to rest, one source said.

“We hope we don’t have to act,” said the source, on the condition of anonymity. “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-percent duty on northern lumber.

It involves a request to the Canada Border Services Agency to study illegal subsidies in Oregon, a process that would take several months. These threats arrive in a climate of escalating trade hostilities with Trump’s recent digs at Canada and his embrace of “America First” trade nationalism. The strongest reactions have come from provincial governments.

Ontario is reportedly 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.