Trump comes out swinging with call for softwood lumber tariff

Dispute playing out amid bigger U.S.-Canada trade file: renegotiation of NAFTA

The United States has fired the opening shot in a latest softwood-lumber war against Canada, with the Trump administration announcing its first batch of duties on imported wood in the neighbourhood of 20 per cent.

The move was expected: The his- toric dispute over lumber pricing has led to once-a-decade trade skirmishes over the issue, resulting in U.S. duties, then the inevitable court battles, and ultimately settlements.

What wasn’t expected was the enthusiasm with which the new U.S. administration flung itself into the lumber hostilities, touting its incoming countervailing duties as an example of President Donald Trump’s tough, America First posture.

Trump underscored the impending move by announcing it to a gathering of conservative media on the eve of the expected announcement. Commerce Secretary Wilbur Ross also highlighted it in an interview.

Then came a statement that said U.S. Customs will begin collecting cash deposits from Canadian logging companies because they receive a range of subsidies — most of them allegedly about 20 per cent.

“It has been a bad week for U.S.Canada trade relations,” said Ross, in a statement that went out of its way to link this dispute to one involving dairy, and tying it all to broader complaints about NAFTA.

“This is not our idea of a properly functioning free trade agreement.”

This entire dispute will play out amid the backdrop of a bigger trade file: the renegotiation of the North American Free Trade Agreement. Neither lumber nor dairy are part of the current NAFTA, and different actors would want to add provisions on one or the other.

What comes after Monday’s countervailing duties is a study of possible anti-dumping duties, followed by a final determination by the U.S. Commerce Department as early as Sept. 7, and ultimately one of three possible outcomes: an agreement, a surprise retreat from the U.S. government, or a potential years-long court battle.

Ottawa condemned the announcement, calling the move unfair, baseless, unfounded and it promised help for its industry.

Natural Resources Minister Jim Carr said the action hurts people in both countries — not only Canada’s lumber sector that employs hundreds of thousands, but also American homebuyers, who must now pay more for wood.