New Trade Alliances of Necessity

"I don't think it's helpful at all to have more sectors of the economy hit by protectionist tariffs."
"It's not a great thing from our perspective. We wish more sensible heads were prevailing on the U.S. side so we could get back to modernizing the NAFTA agreement."
"I think the Canadian government has reached out [to the steel and aluminum sectors], and you are seeing unanimity among premiers including our premier [John Horgan]. This is a place where you should stand together as one country."

"[From the lumber industry's perspective, the U.S. construction market needs Canadian lumber, which is evident in high lumber prices], so it's super frustrating."
"And I'm sure for [companies] that haven't been exposed to this level of protectionism, it must be very frustrating to them."
"Who's really suffering [as a result of 20 percent U.S. tariffs on Canadian lumber] is the U.S. consumer."
Susan Yurkovich, president, B.C. Lumber Trade Council

B.C. Lumber Trade Council president Susan Yurkovich,

- Citizen file photo by Brent Braaten

"We believe the lumber producers were acting not much differently than the oil cartels did back in the 1970s. There is just too much evidence that leads us to conclude that there was profiteering going on."
"He [Vermont home builder] just opened up a wood pallet for his next project, and the lumber was Russian."
"We're at a point where Americans and Canadians are exporting to China, and the Russians are finding it cost-effective to export to the United States ... We've gone through the looking glass."
Jerry Howard, CEO, National Association of Home Builders

"There's no one to pass that cost on to [the tariff imposition on Canadian lumber imports Trump imposed on Canada]."
"It's crippling, quite frankly ... Those kinds of changes are very difficult to run a business around."
"Every increment you go up excludes people [potential new home purchasers] from the market."
Bill Tuyn, vice-president development, Forbes Capretto, custom-home builder, Buffalo 

President Donald Trump's ignorance on free trade issues between countries and the details that irritate him, not necessarily bearing any resemblance to reality, hasn't stopped him from acting on his erroneous impressions and assaulting what he claims is the undue entitlement to profit from a trade agreement with the United States by other, lesser-endowed countries for whom trade is an economic national imperative unlike the U.S. which can take it or leave it, given its huge consumer base, able to absorb its production.

But there are items of primary production that other countries excel in and it is their exports that the U.S. is interested in, to ensure that all its own needs are being met. A simple enough transactional device known as trade and in the global atmosphere where freer trade is recognized to benefit all countries that engage in it, Trump's brilliant move in closing off the U.S. to incipient and present free trade agreements even while important trading partners' production is now integrated with that of the U.S. making separation problematical for all involved, hasn't cautioned him to second-think his split-second decisions.

Now, the home building sector in the United States is pointing a finger of blame at the lumber producing sector, claiming that it has artificially increased the price of building lumber on the backs of home builders. Reliance on Canadian lumber with its ready availability, but with the added headache of the 20 percent increase in cost due to Trump-imposed tariffs has made new housing starts in the U.S. quite a bit more expensive for new buyers and the housing construction companies eager to sell their inventory.

Now that they are under stress, Canadian lumber producers have diversified, seeking customers elsewhere than their traditional export base in the United States. The U.S. share of Canadian lumber exports has fallen from 85 percent in the 1990s to its current 50 percent, a significant difference. And while U.S. home builders were unsupportive of the duties imposed on Canadian lumber, they now look to reduce their traditional dependence on Canadian lumber.

Their suggestion is to cull the U.S. national forests which have about 300 trees per acre in comparison to most other nations' 100 per acre, using downed or diseased wood culled from the forests to help builders and just incidentally, they say, keep the woodlands in a healthier state, less prone to wildfires feeding on dead timber. Ironically, wherever and whenever Trump pries open doors and sticks his fingers in the open cracks to insinuate his primacy in the art of the deal, normalization unravels speedily.

But it isn't quite as though things always went smoothly in trade between Canada and the U.S. Bullying tactics are the forte of the bully. Canada has always weathered accusations of unfairness from the U.S. which claims that Canadian softwood is subsidized since most of it is harvested from Crown land and American lumber from private land, in contrast, with subsequent higher costs. Its the conventional argument of evening the playing field.

Canada has made frequent use of the trade dispute resolution system in response to countervailing and anti dumping duties the U.S. slaps on Canadian lumber products; dispute rulings that have generally favoured the Canadian position; in a system that Trump is anxious to scrap, as he 'improves' the NAFTA agreement, strong-arming Mexico and Canada into meeting his 'fair' and even-handed terms.