Why the U.S. is placing tariffs on Canadian lumber

If the estimates from the Commerce Department are accurate, Canada is currently subsidizing the sales of more than a half dozen different Canadian lumber companies at rates of anywhere from 12 to 24 percent. As soon as they start doing that, their companies are able to begin selling their products at rates which are significantly below the break even, profitability point without suffering the consequences of doing so which would afflict any company attempting it in a true free market scenario. That means they can undercut American lumber companies, costing us business and jobs.

That may sound like “free trade” to you, but it’s hardly anything approaching a fair deal from a nation which is ostensibly our reliable ally and trading partner. We run into the same thing in other friendly nations like France, where they massively subsidize their steel industry. It’s tricks like these from governments with no core beliefs in the free market which have hollowed out American manufacturing, textiles and raw materials development for decades.

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One response to “Why the U.S. is placing tariffs on Canadian lumber

  1. What a crock. The majority of land harvested in Canada comes from Crown land’s at open auction – usually with long term leases. The Americans harvest predominantly on private land with short-term leases. Couple it with the fact we are a geographically a much larger country with a lot more of trees, and a low exchange rate for our dollar – and the Americans whine ‘no fair’,

    We have been harvesting on crown land at auction long before America was even a country. It was never a problem until the Canadian dollar dropped below 90 cents USA. I believe the first dispute was around 1982 when the Cdn dollar traded at 80 cents on the US dollar.

    This isn’t the first time, the second time, the third time, or even the 4th time the Americans have accused of us of ‘unfair’ subsidy on softwood lumber but we keep winning at neutral third party arbitration. Of course, nothing says subsidy like the US Forestry Department maintaining logging roads for harvesters on private land.

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