Canada’s trade minister says tariffs on lumber will be ‘significant’

Canada’s trade minister said Thursday that the U.S.’s tariff rate on softwood lumber will be “significant” when the tariff is formally imposed, and said he was disappointed by the resolution announced on Thursday.

“Of course there are still issues on how the dispute resolution mechanism should work and how the tariff rate should be structured,” François-Philippe Champagne said in a press conference in Ottawa, according to a Reuters report.

“It won’t be the 25 to 27 percent we were expecting,” he added. “That said, we remain optimistic about the possibility to resolve our differences.”

Canada has filed a challenge against the tariff rate with the World Trade Organization.

“This doesn’t address the real concerns that we’ve raised,” Mr. Champagne said. “We’ve made it clear that we hope the dispute resolution process will work as it should.”

In November, the Canadian government won a preliminary ruling against the U.S. trade proposal to impose 25 percent tariffs on Canadian lumber producers. At the time, Canada’s Minister of Foreign Affairs Chrystia Freeland called the decision “a critical win for Canadian manufacturing and a major step forward for Canada-U.S. relations.”

The final tariff rates set by the U.S. were 23.1 percent and 25.6 percent, respectively.

According to the Canadian Press, the Canadian government has been negotiating with the U.S. to lower the tariff rate to 20 percent. But the U.S.’s decision was met with criticism from some Canadian officials.

“Who is going to pay the taxes? What kind of laws are they setting in the United States for American taxpayers?” the former Canadian cabinet minister Rob Nicholson said, according to Reuters.

In addition to softwood lumber, Canada-U.S. trade is also contentious over the country’s dairy and softwood lumber industries.

The U.S. Commerce Department issued the preliminary final anti-dumping duties on softwood lumber at last year’s hearing.

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