Some people warn as Canada threatens retaliation for U.S. timber tariffs

News analysis

Ottawa says it is prepared to retaliate against Washington’s decision to raise tariffs on softwood, but some say this approach may not benefit Canada.

In the latest round of tariff disputes, the US Department of Commerce announced on November 24 that tariffs on Canadian softwood imports have been significantly increased from 9% to 18% at most factories.

The next day, Mary Ng, Minister of International Trade Issue a statement Deputy Prime Minister Chrystia Freeland said Canada would impose tariffs as needed, but blamed the increase.

The US side claims that Canadian industry benefits from government subsidies in the form of submarket tariffs for harvesting on public land rather than private land.

Last year, the Trump administration planned a slap 10% tariff Canada’s aluminum cites national security reasons, but after Canada threatened to retaliate with $ 3.6 billion in countermeasures, the administration Back off..

But this retaliatory tariff may not be wise, says Jeffrey Hale, a professor of political science at the University of Lethbridge.

“Canada must be reasonably measured by the approach it takes,” Hale told The Epoch Times, “We are much more dependent on Americans than we are.” ..

“Lane Kirkland, the former head of the AFL-CIO, once warned us about being involved in a trade war in the United States. He explained that it was a leap with the unicorn.” Mentioned the US Labor Union Industrial Organization Council, the largest trade union federation in the United States.

Hale says the process should be followed, as the Biden administration appears to be in compliance with the treaties it follows, but it’s tough.

“Where the Biden administration is in compliance with legal proceedings, Canada must go through a glacier process in pursuit of the USMCA. [free trade deal] Dispute resolution to address the problem of softwood, “he says.If Canada ignores the rule, “We get a license [the United States] Further ignoring the rules poses a significant potential disadvantage. “

The Montreal Institute for Economic Research, a free-market think tank, warns that imposing tariffs on US imports will hurt Canadian consumers and “just make things worse.”

“Protective trade is a defeat policy,” said the institute. Said On social media.

In parliament on November 25, Freeland was pressured on the issue by opposition parties who accused the government of having a bad relationship with the Biden administration.

“We … make it very clear that Canada is ready to retaliate to protect its national interests. We did it before. We will do it again if necessary.” She said.

Conservative MP and diplomatic critic Michael Chung said Prime Minister Justin Trudeau “promised a new relationship with the Biden administration.” Instead, they’ll get tax credits for electric cars that threaten the job of cars, strict US buying policies, measures for dairy farmers, measures for pipelines that have contributed to higher energy prices, and doubling tariffs on softwood. I put it in. “

“It’s clear that Canada’s position in Washington has declined,” he said.

Based on precedent, Canada can successfully overcome the threat of retaliation, Patrick Tyrrell, research coordinator at the Washington-based think tank Heritage Foundation, told The Epoch Times.

“Canada has retaliated in the past with dollar-to-dollar countermeasures, including slapping tariffs on US steel, aluminum, whiskey, and many other items in response to double-digit tariffs on Canadian products by the United States. “Tyrell said. ..

Tariffs in addition to inflation issues

Tyrrell has accused the US of raising tariffs when inflation is at its highest level in 31 years and living costs are rising rapidly in both countries.

“Double the tax on Canadian softwood hasn’t come at the worst time for new homebuyers and other lumber users in the United States,” he says.

Both Hale and Tyrrell suspect that the rising costs of accommodating tariffs are sufficient to discourage Washington from proceeding with its plans.

“I don’t know if the Biden administration feels pressure to eliminate tariffs,” Tyrell said. “It depends on what they mean by taking seriously the problem of inflation that hurt Americans every time they go to the store.”

“I think US housing costs are a relatively small consideration in a great plan for things, as the Federal Reserve isn’t actively raising interest rates because of the size of US debt,” Hale said. I am saying.

“This is a government that is not big on economic fundamentals. It is a government that seeks to maintain trace contact with economic sanity, despite the wings of activists.”

The surge in inflation brought about by supply chain problems caused by huge government spending and the blockade of COVID-19 Dogging According to Quinnipiac University, U.S. President Joe Biden, whose approval rate has recently dropped to 36% vote..

In light of this and other domestic challenges, resolving timber disputes with Canada may be a low priority, says Hale.

“Given the fact that the president is defending on his most important issue, Canada will not be that high on radar given the agenda of the Biden administration’s overload.”