Canada considers retaliation for US tariff on softwood lumber

Canada is considering multiple trade actions against the US in response to tariffs on softwood lumber.

Prime Minister Justin Trudeau said on Friday he was considering banning US coal exports in response to the “unfair” tax on Canadian lumber.

The government is also looking at duties against several Oregon industries, the BBC has learnt.

Oregon has been one of the loudest supporters of an up to 24% tax on Canadian softwood lumber.

Mr Trudeau wrote to British Columbia (BC) premier Christy Clark to say that he was “carefully and seriously” considering trade action on coal exports. He said trade officials will explore next steps.

Ms Clark had previously asked Ottawa to ban US thermal coal exports, and has said she will impose a tax on thermal coal entering BC ports regardless of the federal government’s decision, because “it is the right thing to do”.

BC is one of Canada’s largest producers of softwood lumber.

“We share the commitment to fighting climate change and protecting the environment,” Mr Trudeau wrote in his letter on Friday.

“We strongly disagree with the US Department of Commerce’s decision to impose an unfair and punitive duty on Canadian softwood lumber.”

The government is also considering imposing duties or other trade action on several Oregon industries, the BBC has learnt.

This has nothing to do with US President Donald Trump, who has been a vocal opponent of Nafta and criticised Canada for protectionist dairy policies, the BBC is told.

  • WATCH: Why is Trump threatening Canada over milk?

Instead, the government is considering levying duties on several Oregon industries, including wine, wood chips, plywood, flooring and packaging material, that receive state support which the Canadian government believes may constitute illegal subsidies.

Democratic Oregon senator Ron Wyden is one of the biggest critics of the Canadian softwood lumber industry.

Canada and the US have long had a trade dispute over softwood lumber, with the US arguing that Canada unfairly subsidises its industry by charging minimal fees to log publicly owned lands.

Last week, the US Commerce Department announced it will charge five Canadian softwood exporters duties ranging between 3.2% to 24.12% to make it a “level playing field”.

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