The Trump administration is butting heads with some Canadian officials after instating a new tariff on the Canadian import of softwood lumber.
The reason behind the tariff is to underline the importance of the administrations ‘America First’ stance.
Canadian Foreign Minister, Chrystia Freeland is particularly distressed by this decision.There is much outrage from the Canadian lumber community.
She says that this tariff will make things more difficult for Americans as well, as a lot of Canadian lumber goes towards building American homes, which will, in turn increase prices for homes and construction.
The 20 percent tariff is actually not likely to make a big effect on home prices, as it only makes up a small fraction of new homes.
This tariff is actually also lower than expected, with the Canadian lumber policy being much more gentle than analysts predicted. There is some worry that this will spark a trade war with our neighbors to the north.
The lumber tariff is best understood as a symbolic gesture by the Trump Administration aimed at underlining its America First stance. The intended audience are trading partners in Europe, Japan, and Mexico. Taking a stand on Canadian lumber is a way of sending the message without seriously impeding larger trade flows. Canada is the model target for such symbolism because it’s unlikely to retaliate against the U.S. for the sanctions, and penalizing Canada doesn’t risk mixing in messier concerns over race, national security or immigration. During a briefing on Tuesday, Commerce Secretary Wilbur Ross praised Canada as “a good neighbor” and played down the possibility that this was the beginning of a larger trade war.
The Trump administration also hoped the move would be welcomed by economic nationalists, first announcing the tariffs at a meeting with conservative journalists on Monday night. Many of Trump’s economic nationalist supporters have become increasingly concerned that the administration may be backing away from America First trade stance that was central to its electoral victory in November. The decision not to designate China as a currency manipulator, for example, has raised fears that trade reforms could take a back seat to other administration priorities.