The trade fight between the U.S. and Canada has reached a whole new level. The Trump administration announced Monday a 20% retroactive tariff on Canadian softwood lumber imports. White House sources said Canadian dairy would be next.
Twenty Percent ‘Tax’ to be Imposed on Canadian Lumber Imports
Trump made the announcement Monday evening in the Roosevelt Room where just four journalists were present. A senior official confirmed the news. Breitbart News’s Charlie Spiering said Trump pledged a 20% “tax” on lumber imports coming from Canada into the U.S.
The U.S. Commerce Department said Tuesday the “countervailing duties” would range between 3% and 24% on Canadian softwood lumber, but the average would sit at 20%. The retroactive tax however will be in effect 90 days.
One journalist present when the announcement was made said the president threatened the Canadian dairy industry with a similar tariff.
Canada and the U.S. have been longtime trade partners, but the relationship has gone sour in recent months. The Trump administration is irked by the Canadian government’s policies on providing subsidies to the domestic lumber industry and its decision to change milk pricing policies which makes Canadian milk cheaper.
The U.S. president deemed the measures “a disgrace” that is killing U.S. businesses in cheese-producing states such as Wisconsin. Commerce Secretary Wilbur Ross confirmed the last week was a bad week for the U.S.-Canadian trade. Ross added that this is not how Clinton-era NAFTA should be functioning.
Canada described the new tariff as unjust and “punitive.”, Canada’s Minister of Natural Resources Jim Carr slammed the Trump administration for its decision to put the extra tax on Canadian imports.
The Canadian government said the move would impact American families the most as the price of lumber needed for building and renovation projects would skyrocket. The Canadians also said that they will likely sue.
According to the Commerce Department’s estimates, Canada exported $5.66 billion worth of softwood lumber to the U.S. in 2016.
A Dairy Tax Coming Soon
A few days ago, Trump promised to help U.S. dairy farmers survive in the face of cheap Canadian imports. Trump told Wisconsin trade farmers that he would be pushing for “fair trade terms” with Canada and other business partners that treat U.S. dairy farmers “unfairly”.
Canada protects its dairy farmers through restrictions on production and import tariffs on dairy coming from other countries. The restrictions have irked large dairy producers such as the U.S., Australia, and New Zealand. And the conflict dates back to the Trans-Pacific Partnership.
New Zealand which is currently the world’s largest dairy exporter criticized Canada for refusing to open its dairy market. Federated Farmers’s director Andrew Hoggard told Canadians that if they plan to build a wall around their country, that’s fine, but they should not attempt to get their subsidized, cheaper products past the wall by exporting them to other nations.
Hoggard, who represents an industry group, said that Canada’s policies harm the livelihood of dairy producers in countries that don’t use subsidies. New Zealand and Australia said they would stand by the U.S. in an possible trade dispute if the World Trade Organization steps in.
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