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Published: Thu, May 04, 2017
Business | By Cristina Jennings

Softwood lumber tariffs fire up trade fight with Canada

Softwood lumber tariffs fire up trade fight with Canada

Tonight! Stephen is concerned about the risky escalation in tensions between the United States and Canada.

Trump first announced the tariffs at a private meeting with conservative journalists in the White House shortly before Ross made the announcement.

"If NAFTA were functioning properly, you wouldn't be having these kinds of very prickly and unfortunate events back to back", Ross said.

The Premier said the upcoming discussions with the U.S.is an opportunity for the country to upgrade Canada's own asks, just as the U.S.is looking to do if or when NAFTA is re-opened.

Early Canadian concerns were partly allayed after U.S. President Donald Trump spoke of America's "outstanding" trading relationship with Canada, and how only "tweaking" would be required for its trade links with its northern neighbor.

The two warned that the action would create a negative effect on families in the US who must now pay more to have their homes built or renovated. Two of those, West Fraser Mills and Canfor Corporation, are getting hit with larger duties than the main rate, while the three others get smaller rates.

TD Securities estimates that for the seven major Canadian lumber producers it covers, the percentage of lumber volume subjected to the new duty ranges from a low of 15% to a high of 50%.

US lumber companies allege Canadian firms are provided with unfair subsidies by the Canadian government.

The Commerce Department said it will conduct a thorough investigation and confirm its position on the lumber tariffs by September 27.

Trudeau is also said to have brought up the issue during his conversation with the US president. The Commerce Department wasn't available to clarify. "So they're quite material items", he said. Yurkovich said that was unprecedented for the Department of Commerce and "entirely arbitrary".

Canadian firms immediately denounced the decision.

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The commerce secretary did not rule out that there would be no impact of this trade ruling.

It might be a different story for other operations with more exposure to the U.S., Murray said.

Canadian leaders also criticized the move.

Trudeau commented a day after the announcement of new USA duties of up to 24 percent on softwood lumber entering the US from Canada. Canada's wood comes mostly from Crown land, with artificially low prices giving Canadian companies an unfair advantage, the USA administration alleges. The tariffs were imposed after a previous agreement expired in 2015.

The New Democratic Party blasted the Trudeau government, saying their "failure" to stop a softwood lumber tax "jeopardizes Canadian jobs". The Canadian officials called the subsidy allegations "baseless and unfounded".

The heated rhetoric came amid fresh attacks from the US president against Canada's dairy industry, and just two months after the two leaders held a warm meeting where Trump said the bilateral trade relationship only needed "tweaking".

Canada's top five forestry companies account for 43 per cent of the softwood production in Canada.

Tariff talks may have started when Canada changed the pricing of their milk to make Canadian milk cheaper.

The Canadian milk tariffs were grandfathered into NAFTA, one of the few areas of trade where major tariffs still exist.

Wall noted the US has a trade surplus, when it comes to dealing with Canada.

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