Ottawa won't immediately offer forestry aid package after US duties announced

President Donald Trump Tuesday turned a simmering dispute between the US and Canada into an open confrontation, announcing a 20% tariff on Canadian softwood lumber imports and threatening in a tweet to go after the Canadian dairy industry.

"We love Canada, wonderful people, wonderful country, but they have been very good about taking advantage of us through NAFTA", Trump said.

The president of a Swan River, Man. sawmill said the announcement of a duty on Canadian lumber is another challenge for the forestry industry. Canada denies that this amounts to subsidy and that producers must sell at market rates.

But dairy and timber have long bedeviled U.S. USA lumber demand exceeds what that country's own industry produces, and the difference has traditionally been made up by Canada.

"If NAFTA were functioning properly, you wouldn't be having these kinds of. very unfortunate developments back-to-back, so in that sense it shows that NAFTA has not worked as well as it should." he told the assembled press.

The Canadian Dollar wilted after this news broke. Meanwhile, hitting back on US imports of goods like cherries and office chairs may have too little impact, leaving Canada with limited leverage.

Despite the agreement, US lumber firms continued to allege that their Canadian counterparts had an unfair advantage which allowed them to sell their lumber in the USA market at prices American firms couldn't sell at.

In a statement released Monday afternoon, Clark called the USA industry's claims "unfounded", and vowed to fight them.

President Donald Trump last week called Canada's dairy protections "unfair".

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NAHB Chairman Granger MacDonald, a homebuilder and developer from Kerrville, Texas, said the association is "deeply disappointed in this short-sighted action by the U.S. Department of Commerce that will ultimately do nothing to resolve issues causing the U.S". A final determination could come in about 90 days.

First it was Canada's dairy, now lumber. Taxes on Canadian imports are expected to increase the cost of lumber for home builders, thus weakening profits.

Ontario and Quebec producers should have free unencumbered access to the US market, Kursman said.

"The case of softwood lumber is a flawless illustration of how protectionism generally provides benefits for a small number of people while harming a majority, and American consumers are not exempt from this logic", Moreau said.

"Canada, what they've done to our dairy farm workers, is a disgrace".

"It's about 31.5 percent of the total US market, so it's a pretty big deal in terms of the Canadian relationship", he told Reuters. Canada shipped $1-billion worth of lumber to China previous year, an increase of 30 times since 2002.

The U.S. and Canada typically enjoy a friendly trading relationship, but things have soured in recent months. This is trade litigation, not a trade war.

The duties on Canadian lumber imports are "a pretty hard blow", Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, said of the lumber sanctions.

"The biggest part of most home prices, in any event, is the land value, not the lumber value", Ross explained. "This new trade action is driven by the same protectionist lumber lobby in the USA whose sole objective is to create artificial supply constraints on lumber and drive prices up for their benefit, at the expense of American consumers".