With A Warning On Dairy Farming And A New Tariff On Lumber, Trump Puts Canada On Trade Notice

The seriousness with which U.S. President Donald Trump is viewing his intention to enforcing trade rules was exhibited by the U.S. governments’ new tariff averaging 20 percent on Canadian timber imports, said the Commerce Secretary Wilbur Ross.

“The Trump administration has been much more focused on enforcement than had been true previously,” he said, taking a veiled swipe at former President Barack Obama’s approach to trade.

The new lumber tariff is not the beginning of a trade war with Canada and it was a result of a long-running dispute, Ross said in a television interview. Trump had promised to hold Canada accountable for unfair practices such as those that have hurt American dairy farmers and this move shows that the President was making good on his promise, he said.

Ross, a billionaire who made his fortune investing in distressed assets, said that the president, while travelling in Winsconsin last week, was particularly troubled by the plight of U.S. dairy farmers.

On Tuesday morning, Trump tweeted a warning about the dairy issue.

As a means of supporting prices that farmers receive, Canada’s dairy sector is protected by high tariffs on imported products and controls on domestic production. And hence other dairy-producing countries frequently criticize the Canada.

U.S. dairy industry groups want Trump to urge Canadian Prime Minister Justin Trudeau to halt a pricing policy that’s disrupted some U.S. dairy exports and prioritize dairy market access in NAFTA renegotiation talks.

Defending its borders to the north and the south is needed by the U.S., Ross said. It is evidence the North American Free Trade Agreement with Canada and Mexico has been a “terrible arrangement” he said even as he accused Canada of engaging in protectionism.

The lumber tariffs are “a precise set of tariffs on a very precise set of imports,” Ross said even though the White House wants to renegotiate the NAFTA agreement.

“The reason we’re putting it on is that Canada’s forests are owned by the various provinces” that charge subsidized prices to the lumbermen there who in turn get an advantage when they export into the U.S., Ross said.

“It seems simply unfair because in the U.S. most of the forests are privately owned, and therefore they pay full-market rate for the stumpage,” the charges for logging on land, he said.

The hypocrisy of nations who say they support free trade but do otherwise, is intended to be stopped by the president, Ross said. Singling out Europe, China, and Japan, he said: “Their rhetoric must match their behavior.”

“If need be, we will do more to defend our borders,” he said

(Adapted from CNBC)

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