2017 International Forest Industries Magazines June July 2017 | Page 18

LOGGING & BIOMASS NEWS - WORLD MARKETS Trump’s tariff on Canadian softwood lumber slammed The Trump administration has fired the first broadside in its battle against bilateral trade imbalances. And its aim was not what most people expected. Canada, not China, is the target of the Trump trade team’s wrath. Commerce Secretary Wilbur Ross has just announced a new 20% tariff on imports of Canadian softwood lumber. The US currently imports about $5.66 billion worth of softwood lumber from Canada every year. It is an essential input for the American construction and home repair industries. This move is ostensibly in response to a petition from American lumber producers, who have long complained that Canada’s system of “stumpage” (charges for logging on Canada’s government-owned lands) amounts to an unfair subsidy. The US has never managed to prove that Canada’s pricing is unfair: it has lost legal challenges at the World Trade Organisation and under NAFTA. But American lumber producers continue to complain, and American governments continue to launch futile legal action against Canada in response to their complaints. Viewed in this light, this move simply looks like yet another attempt to pacify American lumber producers. But anyone who was paying attention to Trump’s pronouncements even before he was elected would have seen this coming. Canada was the first of six countries listed by Peter Navarro and Wilbur Ross as the primary “cause” of the USA’s trade deficit. Consider that roughly half of our trade