New U.S. lumber tariffs amplify dispute
Stiff new tariffs on Canadian softwood lumber imposed Tuesday were hailed by the Trump administration as an example of its willingness to crack down on unfair trade policies, as Canadian companies and industry groups vowed to fight back against the “crippling” measures.
The new import duties range from three per cent to 24 per cent, and apply to U.S.-bound shipments from Canadian forestry companies.
With Trump’s tax-reform package coming Wednesday and the looming renegotiation of the North American Free Trade Agreement, Prime Minister Justin Trudeau is being forced to walk a fine line to defend Canada’s interests with its largest trade partner.
Prime Minister Justin Trudeau says the relationship between Canada and the United States is not limited to a trade dispute, and the two countries would suffer from a “thickening” of the border.
Trudeau was in Kitchener, Ont., on Tuesday morning when he commented on the U.S. decision to impose tariffs on Canadian softwood lumber.
“Our economy is very much linked to that of the United States, but it is not a one-way relationship,” Trudeau said.
“There are millions of good American jobs that depend on a fluid circulation of goods, services and people. You cannot thicken this border without harming people on both sides.”
Then, taking a more conciliatory tone, Trudeau said there will always be “political pressure” on one issue or another and Canadians must remember the importance of the relationship between the two countries.
Finally, he warned Canadians should not listen too much to the “special interests that always want to close doors or impose barriers.”
The U.S. Department of Commerce is to impose a 20-per-cent countervailing duty on Canadian exports on Tuesday.
Quebec’s forest industry is doubly penalized by the new U.S. softwood lumber tariffs, according to St-Félicien Mayor Gilles Potvin.
“It really puts us in a difficult situation, and the last small family businesses still in the race will be penalized even more,” he said. “They will not have the capacity to withstand this new pressure. “
These tariffs will be added to the fees associated with the Quebec forest system since 2013, explained Potvin, who is also the spokesperson for the forestry committee for the Union des municipalités du Québec (UMQ). Under this scheme, 25 per cent of the timber supply is auctioned.
The UMQ strongly condemns the decision of the U.S. Department of Commerce, and calls for a federal government boost as soon as possible in the form of loan guarantees for the affected companies.
“In this beautiful year of the 150th (anniversary of Confederation), when we celebrate this beautiful great country that came into the world through the forest, among others — it is the forestry industry that has been a vector of development of the Canada — could we not have a little bit of consideration from our prime minister?” Potvin asked.
Representatives of the UMQ forest committee travelled to Ottawa in February to raise awareness among parliamentarians, but Potvin said he felt “a lot of indifference” on the part of Liberal MPs.
The UMQ considers the financial impact of the U.S. decision could exceed $200 million.
Potvin fears an economic downturn in the resource regions.
More than 220 municipalities in Quebec are in the forestry sector.