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Canada and the United States Argue Over Lumber and NAFTA

The softwood lumber dispute between the United States and Canada is just one trade argument that seems like it’s going to take a few years to sort out.

President Donald Trump announced this Monday that there will be countervailing duties of up to 24 percent on any of the softwood lumber brought from Canada. In response to this, Cana threatened legal action. The last time the United States and Canada had a spat over softwood lumber it lasted from 2001 to 2006.

Yet many say that this won’t be easily solved for either side. Duties aren’t able to be appealed until they are finalized. While that is taking place, it will cost an extra C$500,000 ($370,000) a month for just one Canadian mill, and that number could be more.

The next thing the U.S. will most likely do is take anti-dumping duties. A decision on that will take place sometime around June 23rd whereas the finalization of the duties won’t happen until January of next year.

The Canadian Foreign Minister, Chrystia Freeland, made a statement on Wednesday saying that Canada believes the next logical step would be toward a settlement. Yet it seems she the first minister to actually make a step toward legal action against the lumber issue. Freeland told Bloomberg, “I would say to my American friends: Be nice to your clients.”

She also seemed pretty confident that any legal action taken would swing their way. She said that, “as has been the case every single time in the past, we’re going to win.”

It was just last week that Trump vowed to fight Canada’s dairy tax. This furthered the tension between countries as the U.S. announces a 90-day notice to begin the discussion about the North American Free Trade Agreement. That negotiation looks like it will run into Mexico’s presidential election in 2018, along with the U.S. midterm election soon after, and the Canadian election due a year later.

Yet it seems that our northern neighbors are at a loss as to what to do. It would seem that Canada is thinking of proceeding with some type of aid package. Navdeep Bains, who is Innovation Minister told a source that “There’s a range of options that are being discussed right now.”

Not all of the provinces agree, however. Ontario announced it has new funding for logging road construction and needed the federal government to offer it a loan. There’s also British Columbia Premier, Christy Clark, who warned that making any type of hasty response was not a good idea. Clark said that “Unfair subsidies to the B.C. industry could really jeopardize our position in court.”

Quebec, which has over 60,000 people working in the forest-product industry, is starting loan programs and guarantees. The aid package would allow as much as C$300 million for a short term.

All this has been a long time coming. It isn’t something that has just recently happened between Donald Trump and the Canadian Prime Minister Justin Trudeau. When it came to Canada and the industry, U.S. ambassador to Canada Bruce Heyman says that “The Obama administration was essentially acting as a go-between.”

The Canadian government held its tongue in regards to what its next steps would be. Former U.S. ambassador, James Blanchard, however, says that “Canada always wins these.”

It doesn’t seem that any sort of deal will be happening in the next year though. During a call with Trump, Canadian Prime Minister Trudeau “refuted the baseless allegations” that had been brought on by the U.S.

This measure won’t favor the United States at all. In fact, it could raise the cost of homes in the United States and even get rid of over 8,241 full-time jobs in the United States.

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