Trump just announced that he’s levying a 20% tariff on Canadian lumber to offset a 20% subsidy from the Canadian government:
DC EXAMINER – Claiming the U.S. has been “taken advantage of” under the Clinton-era NAFTA trade deal, President Trump Monday night opened a trade war with Canada, announcing a retroactive 20 percent “tax” on lumber imports, and promising a similar tax on Canadian milk.
“Canada has treated us very unfairly,” the president said in impromptu remarks at a reception for conservative journalists. “We have been taken so advantage of,” he said, speaking it the Roosevelt Room.
Commerce Secretary Wilbur Ross, who accompanied the president into the reception, said that the “countervailing duty” would be retroactive 90 days. He said that was when Canada was warned to stop subsidizing their lumber industry. The countervailing duty is meant to offset the subsidy.
“They were on notice,” he said.
The president put a jobs spin on the decision, which he had planned to announce Tuesday. “It’s going to mean that we’re doing lumber in our country,” he said.
The tax on specialized milk, used for cheese making, is expected to follow.
I really don’t trust Trump’s instincts on trade as we’ve seen him threaten high tariffs just to manipulate manufacturers.
That said, I’m not saying this tariff is wholly inappropriate. Even it is justified, what I do fear is the potential trade war that could ensue, especially considering that Canada is a big trading partner with the US.