Timber, dairy disputes test US- Canada relations

WASHINGTON — President Donald Trump has long railed about unfair trade practices of China and Mexico. Now he’s drawn a new target — Canada.

The two countries are suddenly sparring openly over inexpensive Canadian timber and Canada’s barriers to U.S. dairy products.

Before sunrise Tuesday in Washington, Trump went on Twitter to declare: “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”

Hours earlier, his Commerce Department had announced plans to impose duties averaging 20 percent on soft-wood lumber imports from Canada. U.S. homebuilders quickly warned that the move would drive up the cost of new houses.

The duties on Canadian lumber imports are “a pretty hard blow,” Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, said. “The message here is that the U.S. not only talks tough, it acts tough.”

“People don’t realize Canada’s been very rough on the United States,” Trump said Tuesday. “Everyone thinks of Canada as being wonderful, and so do I. I love Canada. But they’ve outsmarted our politicians for many years.”

The U.S. and Canada, among the most open economies in the world, enjoy a booming cross-border trade. But U.S. lumber mills have been complaining about cheap Canadian imports since the 19th century.

This week, Commerce Secretary Wilbur Ross announced duties ranging from 3 percent to 24 percent on soft-wood lumber imports, arguing that Canada unfairly subsidizes its industry.

“They’re generally a good neighbor,” Ross said Tuesday. “But they still have to play by the rules.”

The U.S. and Canada are also wrangling over dairy. Ottawa shields its dairy farmers from foreign competition, regulating prices and production and taxing imports heavily. But a new American product — a type of unfiltered milk used in cheese — had not been blocked by Canada’s trade barriers. Canadian dairy farmers complained about the cheap imports, so Ottawa changed its pricing policy, effectively barring unfiltered American milk.

Some American dairy farmers have been devastated and, in a speech last week in Kenosha, Wisconsin, Trump declared that Canada has been “very, very unfair” to dairy farmers and promised to “start working on that.”

—The Associated Press, The Washington Post and wire reports