U.S. levies tariffs on softwood

The United States has fired the opening shot in a latest softwoodlumber 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 historic dispute over lumber pricing has led to once-a-decade trade skirmishes over the issue, resulting in American duties, then the inevitable court battles, and ultimately negotiated settlements.

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

What comes after these 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 yearslong court battle.

It will all play out amid the backdrop of a bigger trade file — the renegotiation of the North American Free Trade Agreement.

America’s lumber lobby applauded the announcement. Canada’s government condemned it. In a statement, the federal government called the move unfair, baseless, unfounded and it promised help for its industry.

“The Government of Canada strongly disagrees with (this) decision to impose an unfair and punitive duty,” said Natural Resources Minister Jim Carr.

“The accusations are baseless and unfounded.”

He said the action hurts people in both countries — not only Canada’s lumber sector that employs hundreds of thousands, but also American home-buyers, who must now pay more for wood.