Speed Reads

Trade Wars

Trump unveils 20 percent tariff on Canadian lumber, firing up trade dispute

On Monday, President Trump told reporters from Breitbart News and other conservative outlets that his administration is slapping punitive tariffs of up to 24 percent on softwood lumber imports from Canada, and Commerce Secretary Wilbur Ross confirmed the news, saying the Commerce Department has determined that such countervailing duties are necessary because Canada subsidizes its softwood lumber industry. The tariffs, ranging from 3 percent to 24.1 percent, will be retroactive for 90 days. Canadian Foreign Minister Chrystia Freeland and Natural Resources Minister Jim Carr jointly denounced what it called the "baseless and unfounded" subsidy accusations, and said Canada will take legal action against the "unfair and punitive duty."

Canada and the U.S. have been sparring over lumber imports since the 1800s, and the current dispute dates back to the early 1980s. The current Commerce Department review was started under the Obama administration, after a truce negotiated under the George W. Bush administration expired. The Trump administration has been hampered in its negotiations for a new deal with Canada by its lack of a chief trade negotiator. Ross said his department had decided to levy tariffs on the merits, but also because of Trump's new interest in Canadian trade disputes, specifically citing Trump being moved by complaints from Wisconsin dairy farmers he met last week. "What we are doing is dealing with another bad act on the part of the Canadians," Ross told The Washington Post.

The preliminary tariffs are subject to approval from the independent U.S. International Trade Commission, but U.S. Customs and Border Protection can start collecting the duties immediately. Softwood lumber is Canada's fourth-largest export to the U.S., accounting for $5.8 billion in sales last year, and among those opposed to the punitive duties is the U.S. homebuilding industry. Last year, the National Association of Home Builders said that a 15 percent tariff would raise the price of U.S. homes by 4.2 percent, costing 4,666 full-time jobs. The U.S. lumber industry says Canadian timber harvest prices cost U.S. jobs, too.