US Commerce Chief Comments on Canadian Trade Relations

On Saturday, the US Commerce Secretary Wilbur Ross issued a strict message directly to Canadian Prime Minister Justin Trudeau regarding what Ross calls “inappropriate” threats of “retaliatory action” against United States tariffs on imports of softwood lumber.

In a statement, Ross said, “The Department of Commerce’s recent preliminary decision to impose tariffs on Canadian softwood lumber was based on the facts presented, not on political considerations. If any Canadian or British Columbian official wishes to present additional information, we will consider it carefully and impartially.”

Of course, this is regarding a statement from Trudeau which informed British Columbia he could be willing to consider the province’s request to ban thermal coal shipments in retaliation for such “unfair” US tariffs.

In a letter to British Columbia’s premier Christy Clark, Trudeau wrote, “The Government of Canada is considering this request carefully and seriously. I have asked federal trade officials to further examine the request to inform our government’s next steps.”

The letter continues, “We disagree strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty on Canadian softwood lumber products.”

Canada remains the United States’ second largest trading partner but this relationship has soured greatly since April.

In April, the US Commerce Department announced that it will charge five Canadian softwood exporters additional duties—falling within a range of 3 to 24 percent—in order to establish “an opportunity to compete on a level playing field,” as described in a related fact sheet. This is preliminary anti-subsidy duty, essentially. Softwood lumber from Canada has been recently valued at an estimated $5.66 billion.

Ross notes, “Threats of retaliatory action are inappropriate and will not influence any final determination. We continue to believe that a negotiated settlement is in the best interests of all parties, and we are prepared to work toward that end.”

Of course, the US Commerce Department still need to finalize these anti-subsidy findings and determine the final duties, which must also be affirmed by the independent entity—the US International Trade Commission—before they can be set in stone for the next five years.