Trudeau under fire after US raises tariffs on Canadian softwood producers

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Softwood lumber piled up along the Fraser River in Richmond, British Columbia, April 25, 2017. The United States revealed the impending doubling of softwood lumber tariff rates just six days after Justin Trudeau met with US President Joe Biden at the White House.JONATHAN HAYWARD / The Canadian Press

Prime Minister Justin Trudeau’s government was criticized on Thursday for its handling of Canada-U.S. Relations following the U.S. announcement to double the punitive tariff rate on most softwood lumber imports from Canada .

The increase in financial penalties on Canadian lumber is the latest in a series of US measures, including a Michigan campaign to shut down Enbridge’s Line 5 pipeline and subsidies to electric vehicles that would displace North American production to the United States, which endangered Canada’s economic situation. interests, opposition MPs indicted in the House of Commons.

Canada also halted the export of potatoes from Prince Edward Island to the United States on November 2 after being warned they would be stranded due to a fungus despite no evidence that the parasite appeared on the market 20 years after its discovery.

US Doubles Softwood Lumber Tariff Rates Against Most Canadian Producers

The U.S. Department of Commerce on Wednesday announced a new tariff rate of 17.9 percent for most Canadian softwood producers, down slightly from the proposed 18.32 percent it had considered imposing. after a preliminary assessment in May. But most Canadian producers currently pay an 8.99% duty rate for shipments south of the border. The new tariffs are expected to take effect on December 1.

The United States has revealed the impending tariff doubling just six days after Mr. Trudeau met with US President Joe Biden in the White House.

“The Prime Minister is committed to renewing relations with the Biden administration. Instead, we got electric vehicle tax credits that threaten our auto jobs, tough U.S. purchasing policies, measures targeting our dairy farmers, actions against pipelines that have helped soaring energy prices and now a doubling of softwood lumber prices, ”Conservative Party critic for foreign affairs. Michael Chong said Thursday during question period.

“It is clear that the Prime Minister does not have a close working relationship with the President. What is the government going to do about it?

Bloc Québécois natural resources critic Mario Simard said Ottawa could no longer blame the poor relations with Washington on former US President Donald Trump.

“What is happening in the United States is very worrying. Ottawa was supposed to campaign to end softwood lumber tariffs; Washington responds by doubling them. Ottawa is supposed to be campaigning for exemptions from protectionism for electric vehicles; Washington is responding by adding a new layer of protectionism, ”Mr. Simard said.

“We used to say it was Trump’s fault. The problem is, today we have Biden. Whose fault is it? I wonder if the problem is not with the Liberal government.

Deputy Prime Minister Chrystia Freeland said Trudeau got along well with Biden.

“The Prime Minister has a very strong and very effective working relationship with the President. I was there. I saw it in action. I saw their long tete-a-tete where important questions were raised, ”she said during question period.

Freeland said the Trudeau government would continue to defend Canada’s interests and warned Washington that it was ready to fight back. “We will do precisely what we have done successfully with two previous US administrations: we present our case clearly and rationally. “

The US lumber industry has cast a wide net in seeking to punish Canadian lumber producers, successfully persuading the Commerce Department to impose duties on businesses large and small.

The main targets of the US Lumber Coalition, such as Resolute Forest Products Inc. and Canfor Corp., are top producers based in Canada, but the much smaller GreenFirst Forest Products Inc. has been singled out and forced to pay premiums. higher duties on lumber shipments. in the USA

Montreal-based Resolute and Canfor-based Vancouver are notable outliers that will have to pay higher tariffs than most other producers. Resolute’s new tariff will be 29.66%, from 20.25% currently, while Canfor will see its tariff rise to 19.54%, from 4.62% currently.

GreenFirst paid a tariff of 20.23 percent, of which 14.19 percent was countervailing duty and 6.04 percent anti-dumping duty.

GreenFirst President and CEO is Rick Doman, son of legendary British Columbia Lumber Baron Herb Doman. The chairman of the company is Paul Rivett, who controls NordStar Capital LP along with businessman Jordan Bitove.

The Commerce Department’s countervailing tariff targets what the Americans consider unfair subsidies to Canada, while the anti-dumping duty is designed to penalize Canadian producers for allegedly selling softwood lumber below market value.

Last week, the Commerce Department rejected GreenFirst’s efforts to secure a “changed circumstances review” of countervailing duties. A ruling on anti-dumping duties is pending. GreenFirst said he would have comments in the future for The Globe and Mail.

GreenFirst’s combined duty rate is expected to drop slightly soon to 17.9 percent, but the company will continue to seek trade remedies to reverse the 20.23 percent.

GreenFirst shares hit a 52-week high of $ 11.36 in April on the TSX Venture Exchange. On Thursday, GreenFirst fell 4 cents to close at $ 1.74 a share, after releasing its third quarter results Wednesday night.

The company, which focuses on sawmills in Ontario and Quebec, lost $ 14.3 million for the quarter ended September 30, compared to a loss of $ 641,000 for the same period in 2020. GreenFirst is recorded in Vancouver and indicates that its head office is Toronto.

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