President-elect Donald Trump has justified his threat of 25% tariffs on Canada by pointing to the US trade deficit. Top Canadian economists have a response to that: it’s all because your country wants cheap oil. The US is on track to end 2024 with the largest overall trade deficit in its history. Its imbalance with Canada is about $60 billion. …Trump has repeatedly claimed the deficit is a subsidy to the Canadian economy, and said Tuesday the US doesn’t need anything from Canada. Import and export data, however, paint a different picture. Among the US’s top partners, its trade with Canada is the most equally balanced — because Canada buys $85 million from the US for every $100 million it exports. When stripping out oil and gas, the US actually has a significant trade surplus with Canada — its biggest energy supplier and a key buyer of American products from food to machinery.
With President-elect Trump set to take over the Oval Office on January 20, the Canadian lumber industry looks to be taking action… advising customers that they will add 25% to lumber exports to the US when the tariff is announced. With Canadian mills already paying an average of 14.4% import duties on US shipments, they have no alternative but to increase prices by the 25% to cover the potential tariff. Nic Wilson, CEO of the Denver Mass Timber Group Summit reports that… “
Nicolas Schmitt, an economics professor at SFU, highlighted that the province’s economy has shifted from a goods-based to a service-driven model. He said this transition has made the economy more diversified and resilient. With key regions like Vancouver and the Okanagan Valley showing strong growth in service sectors, B.C. is well-positioned to withstand global economic uncertainties and to continue thriving. “This war might affect more interior B.C. than urban B.C. That is a potential problem for the interior. Where those lumber mines and all those goods are being exported. So that creates an urban rural divide.” In a statement provided by Kurt Niquidet president of the B.C. Lumber Trade Council, he said federal parties must collaborate to tackle the ongoing softwood lumber duties and the potential imposition of further tariffs. …While B.C.’s diversified economy offers resilience, the potential impacts on industries like lumber, especially in rural areas, require attention. 
U.S. president-elect Donald Trump’s increasingly bold threats against Canada’s economy and sovereignty suggest “there’s something dangerous brewing” and a serious response is needed, a U.S. analyst says. David Frum, a staff writer at The Atlantic who has covered U.S. politics for decades, doesn’t believe Trump actually wants to make Canada a U.S. state, but says the fact the incoming president keeps repeating that idea means he’s eying some kind of aggressive action. …Frum said Canadians should brace for that “tariff aggression,” which Trump can pursue with several unilateral actions, including declaring a national emergency to justify them. He added Canada will also be impacted by Trump’s aggression toward Latin American allies, particularly Mexico. Canada may also soon see the arrival of thousands of people fearing deportation from the U.S. seeking refuge from Trump’s pledged crackdown on illegal residents and immigration, Frum said.
Donald Trump is threatening to use “economic force” to make Canada the 51st American state. While his comments may be reckless, they are in part due to Canada’s over-reliance on the US market in terms of trade. The benefits of international trade are undoubtedly positive. It’s well-established that when countries can produce a product or service more cheaply than others, giving them what’s known as a “comparative advantage,” all other nations engaged will gain from that trade. …But the key challenge Canadian policymakers face is an over-reliance on the US as Canada’s primary market, with 75% of all Canadian exports headed south. …Canada can no longer take easy access to the U.S. market for granted. …Bringing down barriers to trade across Canadian provinces would create conditions that could enable Canadian companies to be more competitive internationally, and beyond the U.S. market in particular.
Advisors on Trump’s incoming economic team are considering a gradual implementation of tariffs, increasing them incrementally each month. This approach is intended to strengthen their negotiating position while minimizing the risk of sudden inflation, according to sources familiar with the discussions. One concept involves a plan to raise tariffs by 2% to 5% per month, using executive powers granted under the International Emergency Economic Powers Act. The idea is still in its early stages and has not yet been formally presented to Trump, indicating that the strategy is in the initial phase of consideration. Trump has not yet approved of the plan. Supporters include Trump advisors Bessent, Haslett and Miran. [to access the full story a Bloomberg subscription is required]
Cabinets made in China were rerouted through Malaysia and ended up in U.S. kitchens—sparking a Customs probe. …Imported cabinets make up most of the $37.5 billion U.S. market. In 2018, the Trump administration imposed tariffs on Chinese-made cabinets as part of broader tariffs, rerouting the flow of those goods. In 2020, the Biden administration slapped them with up to 262% in antidumping duties, a penalty imposed on imports judged by the U.S. to be sold for below fair value. In response, Haiyan and other Chinese companies have moved operations or established new facilities in countries such as Vietnam, Malaysia or Thailand, where they can send raw materials to make goods. Some companies have used these countries as temporary holding places where they can mask the origin of goods, according to CBP investigations. …“It’s kind of a shell game,” said Betsy Natz of the Kitchen Cabinet Manufacturers Association. [to access the full story a WSJ subscription is required]
The union representing 45,000 dock workers on the U.S. East and Gulf Coasts and their employers on Wednesday said they reached a tentative deal on a new six-year contract, averting further strikes that could have snarled supply chains and taken a toll on the U.S. economy. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) employer group, called the agreement a “win-win.” The deal includes a resolution in automation, which had been the thorniest issue of on the table. …”This agreement establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports.” Terms of the deal were not disclosed. ILA and USMX have agreed to continue operating until the contract is ratified. …Employers at the ports stretching from Maine to Texas include terminal operators like APM, owned by Maersk, as well as China’s COSCO Shipping and Switzerland’s MSC.
The mere threat of tariffs being tacked onto Canadian lumber imports in the U.S. is raising fears of panic buying that could roil lumber markets and prices. “A number of Canadian lumber companies are now advising customers that they will add 25% to lumber exports to the U.S. when the tariff is announced,” 
A potential hike in tariffs imposed on Canadian exports to the US as early as January will highlight developments that could define first-quarter trends in the softwood lumber market. …Many traders have expressed a perception that the US economy will prosper in 2025 with a more business friendly administration in the White House. However, if the tariffs are imposed, they could significantly alter the flow of softwood lumber and panels from Canada to the US. Some Canadian producers have already noted that they will withdraw from the US market rather than deal with the rising costs. If returns on shipments to the US plunge, many Canadian mills could funnel a larger percentage of production offshore, especially to Pacific Rim destinations. …Southern Pine traders hope the first quarter sets the stage for a rebound after a difficult year in 2024. Production outpaced demand for most of the year, sustaining steady downward pressure on prices.
Predictions for 2025 include: Energy output will jump… we’ll stop talking about hybrid work… maybe… the education boom will end… the north will struggle to retain population… we’ll stop ignoring the provincial deficit. …The outlook for f
The Biden administration is dropping its efforts to issue a policy to protect old-growth forests — though the president previously touted protecting such forests as an important component of his climate agenda. Late Tuesday, Forest Service Chief Randy Moore announced that the agency did not plan to move forward with proposed protections for old trees. The Forest Service also published a letter Moore wrote to regional officials. That letter cited “place-based differences that we will need to understand in order to conserve old growth forests.” …However, with the transition to the second Trump administration looming, even some environmental advocates say halting the effort may have been a savvy move. Alex Craven, for the Sierra Club, noted that a congressional repeal could prevent future Democratic administrations from pursuing a substantially similar rule in the future. …Biden’s proposal to protect the forests had garnered pushback from Republicans and the timber industry.
AUSTRALIA — A war of words – and glossy brochures – has flared up in the scientific world over whether Western Australia’s major prescribed-burning program across the forests of its south-west is doing more harm than good. The South-West Forests Defence Foundation launched its publication Prescribed Burning Fact Sheets – August 2024 outlining scientific research arguing current prescribed burning practices in the south-west forest regions does not give effective protection from wildfires, is hazardous to people’s health and is causing irreversible loss of biodiversity. The foundation favours a rapid detection and suppression response to bushfires. …In response, the Bushfire Front advocacy group has released its own pamphlet critiquing the foundation’s “flawed” proposal, saying it’s not based on sound science and would have disastrous outcomes in the event of a major bushfire. It states… that the response-only method was trialled and failed in the early 1900s.
