On Tuesday Justin Trudeau called President Donald Trump to discuss a variety of trade issues. The White House stated the two leaders had a “very amicable call”. The conversation centered around the issue of softwood lumber. On Monday the Trump Administration decided to impose tariffs on softwood lumber that Canada imports into the United States. The U.S. Commerce Department has accused Canada of improperly subsidizing the sale of softwood lumber to the United States. The tariffs could be as high as 24 percent and will be collected retroactively up to 3 months.
The current dispute over softwood lumber goes back to 1982. The United States imports about $5 billion a year in softwood lumber. In the phone conversation, Prime Minister Trudeau called the allegations “baseless”. The Prime Minister went on to state that ” Canada will vigorously defend the interests of the Canadian softwood lumber industry.” However, both Trump and Trudeau agree a negotiated settlement is important.
President Trump and Prime Minister Trudeau also discussed the trade in dairy products. On Tuesday the Trump Administration accused Canada of “protectionist” policies on dairy products due to high tariffs. President Trump has stated that the trade relationship between the United States and Canada is “very,very unfair.” U.S. Commerce Secretary, Wilbur Ross, has stated that part of the problem is the fact that dairy is not covered under NAFTA. Prime Minister Trudeau countered the Trump Administration’s accusations by pointing to the fact that the U.S. has a $400 million dairy surplus with Canada. Trudeau emphasized the importance of NAFTA. He has said that he is “not going to overact” to the disagreements.
President Trump and Prime Minister Trudeau discussed other issues but dairy and lumber dominated the conversation. Both Trump and Trudeau agree the conversation was constructive and civil. They both down play any possibility of a trade war between the two allies. Perhaps, it is just a warm up to plans to renegotiate NAFTA. U.S. Commerce Secretary, Wilbur Ross, has stated he hopes to launch formal talks to renegotiate NAFTA this summer.