Region Archives: Canada

Regardless of whether Trump will impose tariffs, Canadian supply chains have become the epicentre of these looming disruptions. The country urgently needs to strengthen its supply chain resilience. If the tariffs were to go into effect, they would reshape the geo-political ecosystem of North America and beyond by disrupting global supply chains. These supply chains are a direct reflection of the geo-political ecosystem in which they operate, and they require stability to establish and thrive. …One of the most effective ways for Canada to strengthen its supply chain resilience is to reduce its heavy trade reliance on the U.S., which can be done through free trade agreements. …Beyond international trade, Canada should also eliminate interprovincial trade barriers to facilitate easier business operations across Canadian provinces and territories. …It is never too late to start, but waiting any longer is no longer an option for Canada.

Data provided by the National Association of Home Builders (NAHB) and Fastmarkets Random Lengths confirm that cost of lumber is a very small component of the price of a new home. Consequently, duties on a share of that lumber imported from Canada resulting from the enforcement of U.S. trade laws against Canada’s egregious unfair trade practices in softwood lumber have a near-zero impact on the price of a new home. The time has come to turn the page on this false narrative by Canada and its U.S. allies that duties on Canadian softwood lumber are a big driver of the cost of constructing a new home… “Since Canada relies almost exclusively on the U.S. market to unload its excess lumber production at any cost—for example, through massive dumping—this new U.S. self reliance for its softwood lumber needs is causing panic within the Canadian lumber export industry,” stated Zoltan van Heyningen, U.S. Lumber Coalition Executive Director. 

California homebuilders say they have few options but to keep buying Canadian lumber, even if it’s hit with 25% tariffs, as they rebuild thousands of homes destroyed by devastating wildfires in Los Angeles. Dan Dunmoyer, president of the California Building Industry Association, said Wednesday that “there aren’t really alternatives” to Canadian lumber because about 80% of Californian land is owned by the federal or state governments and can’t be logged. Dunmoyer also said California lacks mills, environmental policies and supply chains that would allow a quick switch to local lumber production. “We like Canadian lumber. It’s super high-quality, properly harvested for the environment. …”I understand it’s all about jobs.… But to try to do this over a weekend and say, ‘Hey, we just want to put these big tariffs on any country without creating the economy within your own country,’ [it] just means higher prices, full stop, full period.”

ACKERMAN, Mississippi — Southeastern Timber Products announced this week it is investing $123.4 million to expand its operations in Ackerman, which could create as many as 40 jobs. Southeastern Timber Products is a family-owned-and-operated manufacturer of southern yellow pine lumber, timber and decking products. The company is expanding its Ackerman sawmill to increase production capacity from 120 million board feet per year to 300 million board feet per year. To facilitate the project, Southeastern Timber Products will install a new sawmill line, new dry kilns and storage facilities. Southeastern Timber Products has a joint venture partnership with Tolko Industries, a company based in Vernon, British Columbia, Canada. One of the largest Canadian investments in Mississippi, Tolko has embarked on what will ultimately be a $150 million investment in the STP lumber mill that was announced in 2022.

A wide shadow of uncertainty has been cast over Canada’s forestry sector by President Donald Trump’s threat to impose a 25% tariff on its lumber products. Several industry groups have released statements criticizing the tariff as unnecessary and harmful for both sides, a sentiment echoed by British Columbia Premier David Eby. …Eby said forestry companies aren’t sure how they should invest or if they should put money into their companies at all. …Forest Products Association of Canada president Derek Nighbor said the US can meet about 70% of its homebuilding lumber needs. …The BC Lumber Trade Council called the tariff plan a “punitive, unjustified protectionist measure.” …National Association of Home Builders chairman Carl Harris said, “Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices.”

The vast majority—72%—of respondents to an HBSDealer poll question say the United States should not pursue a policy of aggressive growth. However, an aggressive approach has been launched —and then quickly paused. …For the home improvement industry, tariffs on Canadian lumber continue to be a central and controversial topic. …NAHB Chairman Carl Harris. “NAHB urges the administration to reconsider this action on tariffs, and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production.” …Meanwhile, with a deeply ingrained opposition to imports subsidized by the Canadian government, the U.S. lumber industry applauds the tariffs. It also discounts the idea that increasing the tariffs on Canadian lumber imports would lead to significantly higher home prices. The US Lumber Coalition argues that softwood lumber prices are currently low and have not kept pace with general inflation.

Maine exports about 2 million tons of wood products annually, and imports 2.3 million tons – mostly from Canada, according to a recent industry report from the Maine Forest Service. Lumber industry officials are concerned the Trump administration’s sweeping tariffs could hurt business, said Patrick Strauch, of the Maine Forest Products Council. “Maine’s forest economy is really intertwined with both Quebec and New Brunswick, Strauch said. “We’re concerned about a broad tariff and how it would distrust disrupt the economy.” Wood pulp and fibers, in particular, are a big part of what moves across the border in order to produce particle board, packaging, and other products in Maine. Strauch said mills located near the border import goods from Canada on a regular basis. “If you’re a pulp mill that’s located close to the border of Canada, you’re going to be importing wood fiber from Canada. That’s just how it works in Maine,” he said.

As Canadians absorb U.S. President Donald Trump’s trade war and his threats to make Canada the 51st state, one thing has become abundantly clear: One of the world’s most durable and amicable alliances — born of geography, heritage and centuries of common interests — is broken. Canadians are feeling an undeniable sense of betrayal after Trump declared a trade war against America’s northern neighbor and longtime ally. Trump keeps threatening Canada’s sovereignty and and vowing to put sweeping 25% tariffs on Canadian products, though Canadian Prime Minister Justin Trudeau said Monday afternoon the tariffs will be postponed by at least 30 days after he promised more cooperation on the border.

In Canada, discussion and disapproval are everywhere. Canadian hockey fans have even been booing the American national anthem at recent National Hockey League games. Addressing the nation this past weekend, Trudeau channeled the betrayal that many Canadians are feeling, reminding Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises from wildfires in California to Hurricane Katrina. The ties between the two countries are without parallel. Nearly $3.6 billion Canadian worth of goods and services cross the border each day. “It’s certainly one of the worst moments in Canada-U.S. relations since the creation of Canada in 1867,” Daniel Beland at McGill University said. “His talk about making Canada the 51st state is a direct attack against the country’s sovereignty. Even if we exclude that threat, he shows no respect for Canada’s sovereignty and institutions.”

Donald Trump & David Eby

Uncertainty still hangs over the Canadian economy despite U.S. President Donald Trump announcing a 30-day pause in tariffs that were to take effect today. The temporary reprieve halts — at least for now — a continental trade war that economists on both sides of the border warned would raise prices. Trump’s decision meant Canada and the provinces also halted their moves to retaliate including with tariffs and bans on U.S. alcohol sales north of the border. Trump on Saturday signed an order to impose 25 per cent across-the-board tariffs on Mexican and Canadian imports, with a lower 10 per cent tariff on Canadian energy. On Monday, following two phone calls with Prime Minister Justin Trudeau, Trump said the tariffs would be off the table for 30 days to see if the two countries could reach a “final economic deal.”

The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency under the International Emergency Economic Powers Act. Until the crisis is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff. President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country. The orders make clear that the flow of contraband drugs like fentanyl to the United States, through illicit distribution networks, has created a national emergency, including a public health crisis. …”This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

In related coverage in:

• The Hill: Trump says potential pain caused by tariffs ‘worth the price’
• The Hill: Trump to speak with Trudeau, Mexico after imposing tariffs

The Government of Canada is moving forward with 25 per cent tariffs on $155 billion worth of goods in response to the unjustified and unreasonable tariffs imposed by the United States on Canadian goods. These countermeasures have one goal: to protect and defend Canada’s interests, consumers, workers, and businesses. The first phase of our response will include tariffs on $30 billion in goods imported from the U.S., effective February 4, 2025, when the U.S tariffs are applied. …Minister LeBlanc also announced that the government intends to impose tariffs on an additional list of imported U.S. goods worth $125 billion. A full list of these goods will be made available for a 21-day public comment period. …In addition to this initial response, Ministers LeBlanc and Joly reiterated that all options remain on the table. …Less than 1 per cent of the fentanyl and illegal crossings into the United States come from Canada.

Related coverage in:

• CBC News: Justin Trudeau announces 25% retaliatory tariffs on US products
• Government of Canada: US products subject to 25% tariffs effective Feb 4

President Trump conceded Sunday that there may be “some pain” from his sweeping tariffs on Mexico and Canada, but they will eventually lead to a new “GOLDEN AGE.” Nice of him to promise a glorious future because the pain is already unfolding. …He also included a blast at these columns for leading the “Tariff Lobby” after our editorial called his 25% across-the-board tariffs on our friends and neighbors “the dumbest trade war in history.” …But bad policy has damaging consequences, whether or not Mr. Trump chooses to admit it. Tariffs are taxes, and when you tax something you get less of it. …The hammer blow to Mexico and Canada shows that no country or industry is safe. …This will cause friends and foes to recalibrate their dependence on America’s market. How this helps the US isn’t apparent, so, yes, “dumbest trade war” sounds right, if it isn’t an understatement. [A Wall Street Journal subscription is required to read the full story]

Related Economic Coverage in:

• RBC Economics: A US-Canada trade shock now in play: first economic takeaways
• The Economist: The three victims of Trump’s trade ware use different playbooks
• PBS News: The potential economic effects of Trump’s trade war in 9 charts
• The Economic Times: $1.4 Trillion: The true cost of Trump’s tariffs for Americans

David Frum

To understand the harm Donald Trump has done with his tariffs on Canada and Mexico, here are four things you need to know: First, every tax on imports is also a tax on exports. …Trump tariffs will be paid in the form of higher prices for imports and their substitutes, and lower profits and wages for everyone who works in export industries. Second, every product is also an input. …Big, sophisticated global companies can shift their input-sourcing but the shift is never easy. For smaller companies, it may prove altogether unfeasible. …Third, “illegal” is irrelevant; don’t expect relief from tariffs through lawsuits. The US has sabotaged the dispute-settlement mechanisms under the North American trade agreements. …Fourth, Americans may not remember their past actions, but others do. …Trump is single-handedly reneging on 80 years of American work to persuade others to trust and rely on the US. …“America First” means “America Alone.” [A subscription to the Economist is required to read the full story]

In Relate Opinion Coverage by:

• The National Post’s John Ivison: Canada is on the receiving end of a hostile act
• The Economist: America will never be as efficient at making cars as it is now
• Daniel Drache & Mark Froese in the Conversation: The brute power of an imperial presidency

David Eby

BC Premier David Eby announced immediate countermeasures to U.S. tariffs on Saturday, including banning ‘red-state’ American liquor from public stores. He says the province will also fast-track permits for local projects and expand trade beyond the US to reduce reliance on its market. “We have targeted red states because, quite frankly, Donald Trump doesn’t care about Democrat states,” said Housing Minister Ravi Kahlon. “We want to make sure that we’re not punishing states that have nothing to do with this.” …John Brink, who employs about 400 people in northern B.C. through his group of lumber-focused companies says his business is already feeling the impact. …Surrey Mayor Brenda Locke says she wrote to Eby Sunday morning urging him to implement tax cuts and roll out a comprehensive relief package, similar to what was introduced during the COVID-19 pandemic, to support businesses and families.

Related Provincial coverage from:

• Journal of Commerce: BC forestry, lumber industries condemn Trump tariffs
• Business groups: Both sides sound the alarm over Trump’s incoming tariffs
• Quebec’s François Legault: Trump decided to attack. We must stand up and fight.
• Ontario’s Doug Ford: Ontario Premier Doug Ford responds to US tariffs
• New York state’s Kathy Hochul: We don’t need a backdoor tax disguised as a tariff
• Washington State Industry Leaders fear higher costs, tougher exports due to tariffs

Northern Ontario’s softwood lumber industry would be decimated if Trump implements a tariff on Canadian goods said Wendy Landry, president of the Northern Ontario Municipal Association and mayor of Shuniah. …Ian Dunn, CEO of the Ontario Forest Industries Association (OFIA) said softwood lumber duties are expected to double this year, as well, to about 30%-35%. “In reality, Ontario lumber producers could face 60% tariffs at the border, which would effectively wipe out all US shipments,” Dunn said. “In terms of global exports, Ontario exports about $7.9 billion of forest products per year. 79% of that goes to the US,” he said. “Sawmills produce lumber, but they also produce residuals which are consumed by the pulp and paper mills.”  “If there’s additional impacts, and there’s less production at the sawmills, there is less raw material for the pulp and paper mills,” he said.

In related forest sector coverage:

• United Steelworkers: David McCall calls on Trump to reconsider tariffs on Canada
• Forest Products Association of Canada: Derek Nighbor responded to US tariffs
• BC Council of Forest Industries: COFI opposes the US government’s tariff decision
• BC Lumber Trade Council: US Lumber Tariffs are Unjustified and Harmful
• Tom Sundher in the Vancouver Sun: If my US customers want the wood, they’ll have to pay the tariffs
• Ontario Forest Industries Association: Additional tariffs present a looming crisis to Ontario

WASHINGTON — U.S. President Donald Trump says he will decide Thursday night whether to include oil in his tariff plan as he confirmed his intention to impose devastating duties on Canadian imports on Saturday. …Trump initially claimed his 25 per cent tariff threat was in response to what he called the failure by Canada and Mexico to curb the illegal flow of people and drugs across the border. His complaints have since expanded far beyond border security. On Thursday, Trump repeated his objections to trade deficits with both countries. …Canadian officials are still hoping a final diplomatic push aimed at lawmakers in Washington and Trump’s team can sway the president. …Finance Minister Dominic LeBlanc described Canada’s border security efforts to Howard Lutnick. …Foreign Affairs Minister Mélanie Joly is in Washington. …Public Safety Minister David McGuinty and Immigration Minister Marc Miller were travelling to Washington.

Related coverage by:

• Pau Pujolas, McMaster University: How can Canada respond to US tariff threat? 
• Mark Zacharias in BIV: Knee-jerk reaction no recipe for BC’s ‘clean energy’ success

President Trump’s advisers are considering several offramps to avoid enacting the universal tariffs on Mexico and Canada that he had pledged, according to people familiar with the matter, even as he reiterated Thursday that the tariffs are coming. The situation is fluid and Trump still may go through with his 25% across-the-board levies. …But amid ongoing negotiations, the administration appears undecided on whether to impose tariffs on all imports from those countries, adding that officials are preparing to opt for more targeted measures instead. Trump is still likely to announce some sort of trade action by Saturday, but it may only affect certain sectors, such as steel and aluminum. Trump may also include major exemptions, such as oil. And the tariffs could be issued using existing legal authorities instead of more novel approaches officials had previously floated. …The administration could also announce new tariffs with a grace period, allowing negotiations to continue.

Related in the New York Times: The World Economy Awaits Trump’s First Round of Tariffs