OTTAWA – Prime Minister Justin Trudeau says the Canada-U.S. relationship is bigger than any one trade irritant – and that both countries would suffer from a “thickening” border.
Trudeau was responding to news that the U.S. plans to impose significant duties of up to 24 per cent on lumber imports – the latest flare-up in Canada’s escalating trade skirmish with the Trump administration.
Trudeau, speaking in Kitchener, Ont., says it’s true Canada has a deeply interconnected economic relationship with the U.S., but that the opposite is also true.
He says millions of good U.S. jobs depend in Canadian trade, citing the North American auto sector as one compelling example.
Trudeau also says the friendly nature of the relationship means both sides will be able to work through any disputes that arise, such as those currently brewing on softwood lumber and dairy products.
U.S. President Donald Trump has been stirring the pot of late, tweeting today that Canada is making life “very difficult” for American dairy farmers and that the government “will not stand” for it.
Lumber and dairy are long-standing irritants – and were also a problem file under previous presidents. In softwood lumber, the countries have a once-a-decade cycle of tariffs, trade litigation, and ultimately settlements.
“We are tremendously interconnected in our economy with that of the United States, but it’s not just a one-way relationship,” Trudeau said today during a stop in Kitchener, Ont.
“There are millions of good U.S. jobs that depend on smooth flow of goods, services and people back and forth across our border.”
Thanks to free trade, there is also a shortage of red tape and regulation that “blocks and gums up the system,” he added.
“You cannot thicken this border without hurting people on both sides of it,” Trudeau said.
“Any two countries are going to have issues that will be irritants to the relationship. Having a good constructive working relationship allows us to work through those irritants.
“There’s always going to be political pressures to raise this issue or that issue … but the core of this relationship is bigger than any two individuals sitting in the top of their respective governments.”
Trudeau warned against paying too much heed to “those narrow interests that always want to close off or impose barriers.”
The softwood spat is unfolding amid a much bigger trade issue – the renegotiation of the North American Free Trade Agreement. Despite remarks from the president and his cabinet secretary, neither lumber nor dairy are actually part of the current NAFTA. However, different actors would be pleased to add provisions on one or the other.
What comes next on softwood is a study of separate anti-dumping duties, followed by a final verdict by the U.S. Commerce Department as early as Sept. 7, and then one of three possible outcomes: a negotiated agreement, a surprise retreat from the U.S. government, or a potential years-long court battle.
Canada’s government condemned the announcement. In a statement, the federal government called the move unfair, baseless, unfounded and it promised help for its industry.
“The Government of Canada strongly disagrees with (this) decision to impose an unfair and punitive duty,” said Natural Resources Minister Jim Carr.
“The accusations are baseless and unfounded.”
He said the action hurts people in both countries – not only Canada’s lumber sector that employs hundreds of thousands, but also American homebuyers, who must now pay more for wood.