The brewing trade war between the United States and Canada is moving from a simmer to a full boil.
A few weeks ago, the United States and President Trump imposed tariffs on Canadian softwood lumber, which was a response Canada’s heavily subsidizing of both dairy and softwood lumber production. Canadian Prime Minister and noted handsome person Justin Trudeau is threatening to fire back, and he’s even considering targeting a specific U.S. State.
Trudeau and the premier of the Canadian province of British Columbia have both threatened to impose high tariffs on the coal imports from the US. Beyond that, the BC premier herself has threatened to target the state of Oregon in particular, a major producer of softwood lumber and a vocal critic of Canadian lumber policies:
More via BBC:
Oregon has been one of the loudest supporters of an up to 24% tax on Canadian softwood lumber.
Mr Trudeau wrote to British Columbia (BC) premier Christy Clark to say that he was “carefully and seriously” considering trade action on coal exports. He said trade officials will explore next steps.
Ms Clark had previously asked Ottawa to ban US thermal coal exports, and has said she will impose a tax on thermal coal entering BC ports regardless of the federal government’s decision, because “it is the right thing to do”.
All of this began with President Trump railing against Canada using price controls and tariffs to protect their dairy industry, a practice that Trump and others have claimed is driving down prices for American dairy farmers. Trump used this as justification to raise tariffs on Canadian softwood lumber.
President Trump has stated his intention to renegotiate the North American Free Trade Agreement (NAFTA).
NAFTA is a treaty between the United States, Canada, and Mexico that liberalized trade policies and removed many tariffs between the three countries. Critics of NAFTA have argued that the agreement has unfairly targeted and harmed American workers.
While free trade is considered by most economists to be something that benefits almost everyone, it is important to remember that President Trump was voted into office by people who had lost their factory jobs to Mexico and Canada.
President Trump has vowed to bring back manufacturing jobs to the United States. This starts with re-negotiating NAFTA and helping American companies bring jobs back from overseas. He’s already done this with Carrier and other American companies.
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