Earlier this year, the Trump administration raised taxes on Canadian lumber exports to the U.S. by up to 27 percent. The move was seen as harmful for the Canadian lumber industry, especially in provinces that rely heavily on the trade such as British Columbia.
Getting close to an agreement
British Columbia Premier John Horgan Announced yesterday that the two countries are close to reaching an agreement. It is believed that the new agreement will improve the situation that was created by the previous U.S. decision to raise duties on Canadian lumber.
That previous decision came after a coalition of U.S. lumber producers had asked the U.S. Department of Commerce and the U.S. International Trade Commission to act in order to reduce Canadian lumber export in to the U.S.
The reason for this request made by the U.S. lumber coalition was that the Canadian government was presumably helping the Canadian lumber industry by unfairly subsidizing and lowering Canadian producers’ cost of production. The coalition of U.S. lumber manufacturers argued that American businesses are hurt because of this unfair competition.
Saving the Canadian lumber industry
Canadian industry representatives and politicians argue that the current situation in which Canadian lumber is taxed at an average of 27 percent is harmful for the industry and that a better arrangement should be found in which Canadian companies will be able to profit and keep their employees. It is important to note that the demand for lumber in the U.S. housing market exceeds local lumber production in the U.S. and Canada was a welcomed partner in lumber trade for many decades.
British Columbia’s premier John Horgan recently met with U.S. officials in an attempt to get better terms in the future lumber trade agreement. Horgan met with U.S. Secretary of Commerce Wilbur Ross and with Robert Lighthizer U.S. trade secretary who is in charge of negotiating the North American Free Trade Agreement (NAFTA). These meetings
Mr. Horgan says that he sees great importance in his attempt to get a better deal as the lumber industry plays an important role in his Province’s economy. British Columbia is responsible for about half of Canada’s softwood lumber.