April 25, 2017 8:05 pm
Updated: April 25, 2017 9:35 pm

Justin Trudeau tells Donald Trump he will ‘vigorously defend’ Canadian lumber

It's a trade dispute that has lingered for years without any long-term resolution. Now the U.S. is slapping a heavy duty on Canadian softwood lumber products. As Eric Sorensen reports, there are fears that friction in the sector could ignite into a trade war.

A A

Prime Minister Justin Trudeau and U.S. President Donald Trump spoke over the telephone Tuesday evening to discuss the brewing trade disputes between their two countries.

Trudeau told his American counterpart that “Canada will vigorously defend the interests of the Canadian softwood lumber industry,” according to a release from his office.

READ MORE: Donald Trump says Canada has ‘outsmarted our politicians for many years’

On Monday, Trump announced his government would impose tariffs of up to 24 per cent on Canadian softwood lumber, a move that affects some $5.66 billion worth of imports of the construction material.

Anti-dumping duties to be announced June 23 could raise the total to as much as 30 to 35 per cent.

WATCH: U.S. Commerce Sec. addresses lumber dispute


Story continues below

The tariff is just the latest in the ongoing Canada-U.S. softwood row, which stretches back to the 1980s.

U.S. lumber producers asked the Commerce Department last November to investigate what they viewed as unfair subsidies to Canadian competitors who procure their timber from government lands at cheaper rates. U.S. lumber producers generally cut timber grown on private land.

READ MORE: First it was Canada’s dairy, now lumber. What might Donald Trump target next?

The prime minister is said to have “refuted the baseless allegations by the U.S. Department of Commerce and the decision to impose unfair duties,” during his conversation with Trump, according to the statement.

Experts who spoke with Global News Monday say that softwood imports are not subsidized and timber auctions run by Canadian governments have changed to better reflect current market rates. Trade resolution panels from both the World Trade Organization and the North American Free Trade Agreement have found that Canadian softwood lumber production is not subsidized.

WATCH: Canada reacts to Trump’s new softwood lumber tax

Canada’s share of the U.S. lumber market has ranged from 26 per cent to 31.5 per cent since 2006, when the countries signed an agreement, down from 34 per cent before that, Duncan Davies, chief executive of lumber producer Interfor Corp told The Canadian Press.

More tariffs are expected to hit Canadian lumber in June. Reporters asked Trump Tuesday if he was fearful of a trade dispute with Canada.

READ MORE: How will Trump’s trade tirade affect the average Canadian?

“No, not at all,” he responded. “They have a tremendous surplus with the United States. Whenever they have a surplus, I have no fear.”

Trump has also made rumblings of late about imposing tariffs on Canada’s dairy industry.

WATCH: Trump says Canada has ‘outsmarted our politicians for many years’

Trudeau is also said to have brought up the issue during his conversation with the U.S. president.

“The prime minister and the president also discussed Canada-U.S. trade in dairy products, trade which heavily favours the U.S.: Canada imports over $550 million of dairy products from the U.S., but exports just over $110 million to the U.S.,” the statement from the PMO said. Trudeau also let Trump know that he would continue to defend Canada’s dairy sector as well.

— With files from Andrew Russell, The Canadian Press and Reuters

© 2017 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.