Trudeau under fire after U.S. raises duty rates on Canadian softwood producers

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Softwood lumber piles up along the Fraser River on April 25, 2017 in Richmond, BC. Just six days after Justin Trudeau met with US President Joe Biden at the White House, the US announced doubling of tariffs on softwood lumber.Jonathan Hayward/The Canadian Press

Prime Minister Justin Trudeau’s government was criticized on Thursday for its handling of Canada-US relations, as the United States announced it would double the rate of punitive duties on most softwood imports from Canada.

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The increase in financial penalties on Canadian softwoods is the latest in a series of US measures, including Michigan’s campaign to close Enbridge’s Line 5 pipeline and electric-vehicle subsidies that would move North American production to the US put the economy at risk. interests, opposition lawmakers alleged in the House of Commons.

Canada also halted exports of Prince Edward Island potatoes to the US on November 2 after warnings they would be blocked on a fungus, despite the parasite’s discovery that 20 years after the discovery of the parasite has shown no evidence of a market.

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US doubles softwood duty rates against most Canadian producers

On Wednesday, the US Commerce Department announced a new tariff rate of 17.9 percent for most Canadian softwood producers, slightly lower than the 18.32 percent proposed after a preliminary assessment in May. But most Canadian producers are currently paying a duty rate of 8.99 percent for shipments south of the border. The new tariff rates are expected to be effective from December 1.

The US disclosed pending doubling of tariff rates came just six days after Mr Trudeau met with US President Joe Biden at the White House.

“The prime minister committed to building a renewed relationship with the Biden administration. Instead, we got electric vehicle tax credits that cut our auto jobs, tougher buy-in US policies, measures targeting our dairy farmers, action against pipelines that contributed to skyrocketing energy prices, and now the softwood lumber tariffs. Doubling up,” conservative foreign affairs critic Michael Chong said during question hour on Thursday.

“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 this?”

The Block’s Quebecois natural resource critic Mario Simard said Ottawa can no longer blame poor relations with Washington on former US President Donald Trump.

“What is happening in the United States is very disturbing. Ottawa should have campaigned to end the softwood lumber tariffs; Washington responds by doubling them. Ottawa is believed to have moved from protectionism to electric vehicles. is campaigning for exemptions; Washington responds by adding a new layer of protectionism,” Mr Simard said.

“We used to say it was Trump’s fault. The problem is that 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 gets on well with Biden.

“The Prime Minister has a very strong, very effective working relationship with the President. I was there. I saw it in action. I saw his widespread controversy where important issues were raised,” she said during the Question Period.

Ms Freeland said the Trudeau government would continue to protect Canada’s interests. “We will do exactly what we have successfully done with the last two US administrations: we state our case clearly and rationally.”

The US lumber industry has cast a wide net in seeking to punish Canadian softwood producers, having succeeded in persuading the Commerce Department to impose tariffs on companies large and small.

The main targets of the US Lumber Coalition, such as Resolute Forest Products Inc. and Canfors Corp., high-profile producers based in Canada, but the much smaller Greenfirst Forest Products Inc., have been chosen and forced to pay higher fees on lumber shipments. in America

Montreal-based Resolute and Vancouver-based Canfor are notable outliers that will require paying higher tariffs than most other producers. Resolute’s new tariff will increase to 29.66 per cent from the current 20.25 per cent, while Canfor’s duty will increase to 19.54 per cent from the current 4.62 per cent.

GreenFirst is paying 20.23 per cent tariff, which includes 14.19 per cent countervailing duty and 6.04 per cent anti-dumping duty.

GreenFirst’s chief executive officer is Rick Doman, son of legendary BC lumber baron Herb Doman. The company’s chairman is Paul Rivet, who along with businessman Jordan Bitov controls Nordstar Capital LP.

Countervailing tariffs imposed by the Commerce Department target what Americans consider to be unfair subsidies in Canada, while anti-dumping tariffs are designed to penalize Canadian producers for allegedly selling softwoods below market value.

Last week, the Commerce Department slammed GreenFirst’s efforts to obtain a “review of the changed circumstances” of countervailing duties. Decision on anti-dumping duty is pending. GreenFirst said that in the future .

GreenFirst’s combined duty rate will soon drop slightly to 17.9 percent, but the company will continue to look for trade measures to reverse the 20.23 percent.

Shares of GreenFirst hit a 52-week high of $11.36 on the TSX Venture Exchange in April. After releasing third-quarter results late Wednesday, Greenfirst fell 4 cents on Thursday to close at $1.74 per share.

The company, which focuses on sawmills in Ontario and Quebec, reported a loss of $14.3 million for the three months ended September 30, compared to a loss of $641,000 for the same period in 2020. GreenFirst is registered corporately in Vancouver and lists its head office in Toronto.

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