President Trump Protects American Lumber
The argument over whether to demand that Free Trade also mean Fair Trade, and whether to impose tariffs on products coming into the US with subsidies from foreign countries to make those products cheaper, has been going on for decades. And every year, Americans lose tens of thousands of jobs because of illegal trade practices from six countries that make up more than half of the US trade deficit: Canada, China, Germany, Japan, Mexico and South Korea.
The Commerce Department recently announced duties ranging from 3% to 24% would be applied retroactively on five Canadian lumber exporters. Overall the duties would average about 20% and could amount to a total of around $1 billion. Additional penalties could be levied if Commerce determines Canadian lumber is being dumped into U.S. markets.
Trump’s tariff has the support of Democratic US Senator Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, who welcomed the administration's lumber ruling. His constituents in the Pacific Northwest had been among those pushing for stronger action on Canadian lumber. This "announcement sends the message that help is on the way," said Wyden.
The U.S. softwood lumber industry has long complained that competing imports from Canada are subsidized by provincial governments, giving Canadian lumber firms an unfair pricing advantage.
Softwood lumber is used primarily for home building. Imports from Canada today account for about a third of the market in the U.S. The National Assn. of Home Builders objected to the tariff and estimated that while the new tariffs would increase output for U.S. producers, they would add $1,236 to the price of an average single-family home.
U.S. lumber representatives disputed that the duties would have a material impact on home prices. They applauded the Trump administration action, saying that enforcing fair trade laws and leveling the playing field could increase the domestic industry’s employment. About 360,000 people work in sawmills and other jobs linked to the industry, such as truckers hauling wood, according to the U.S. Lumber Coalition.
The dispute over softwood lumber between the two countries spans decades. American lumber mills complain that most of the timber used by Canadian rivals is bought from government forests at below-market prices.
Despite the Trump administration’s spotlight on the tariffs and messaging that it was part of stepped-up enforcement on trade, analysts at Barclays Bank said the new tariffs on Canadian lumber were not unusual and that “any administration would likely have had to take action in response to the trade association’s complaint.”
Canadian lumber companies, some of which are owned and operated by the Canadian government, have purchased American lumber companies and closed them, to eliminate some of the competition.
Since the early 1980s, the U.S. has argued with Canada over how much softwood lumber the country’s suppliers can sell in the U.S. and at what price. The two nations have negotiated temporary agreements in previous years over softwood, which comes from trees that have cones, like pine or spruce, and is preferred by builders for constructing home frames.
“We need to protect our American companies and industries like our Dairy Farmers and Lumber Companies. It’s just like buying a $5 shirt from China instead of having it made in the USA for $8. Is it worth it to make it here in the USA and pay a little more, knowing that you are helping employ Americans? Yes it is, and if we can protect 360,000 Lumber jobs in America by stopping unfair trade practices in Canada, I say thank you President Trump,” said Frank Spotorno, co –founder Bringourjobshome.com