‘Friend’ US shuts down Canadian businesses as Canada struggles to put up a fight

The United States and Canada share a bonhomie, right? But, hey look, Canada’s all-weather ‘ally’, is busy pursuing anti-Canada measures. Moreover, the US never even shies away from flatly dismissing Canada as an ally. 

But Canada never fails to pose as a ‘true-blue’ ally. We know how Canadian foreign policy has followed the same course as that of the United States, with the Canadian government committing loyally to any of its decisions or endeavours. But, what had the US done in retaliation? 

It seems that the US- Canadian relations are travelling on a rugged path now. ‘Friend’ US is now hitting Canadian businesses. And, the ‘loyal-friend-Canada’ might have been taken aback. But it could do nothing rather than struggle to put up a fight.

The US is hitting Canada’s biggest industry. Canada is the second largest producer of softwood lumber in the world. The industry is valued at a whopping $10 billion and is highly export-oriented. You see, the majority of these exports were to its ‘friend’, in the south. Washington relied upon Canada for its 80% imports of softwood lumber. So far, so good. 

But here’s a catch. The US shocked Canada by imposing heavy import duties, which are now having rippling effects. As the long-running trade conflict continues, the U.S. is imposing penalties on Canadian softwood timber that would essentially impose punitive tariffs on the majority of producers.

The U.S. Department of Commerce announced on Tuesday that Canadian producers of softwood lumber will be subject to preliminary anti-dumping and countervailing tariffs averaging close to 12%. The action comes in response to the government’s proposal to increase the combined duty rates on exports from Canadian corporations in late 2021.

Read More: USA’s ambassador to Canada openly rejects Canada as an ally

The softwood lumber industry of Canada has been subjected to US tariffs in 2017 as well.

While the decision benefits American producers, it also raises costs for those who import more than 25% of their lumber from Canada. Despite an extraordinary rise that drove prices to all-time highs during a pandemic-driven housing bubble, the United States raised duties on Canadian lumber imports in 2021.

Now, what will Canada do? Will Ottawa initiate any challenge against its long-time ‘friend’?

You see, Ottawa is now questioning the US duties on softwood lumber of Canada. International Trade Minister Mary Ng calls these duties “unwarranted and unfair.” 

In a statement, Ng claims that the taxes hurt Canadian businesses and workers while also taxing American consumers, who are already struggling with supply-chain problems and inflation. 

This month, the U.S. dropped its anti-dumping and countervailing duty rate in half, from 17.61 to 8.59 per cent, but Ng indicated that Canada will continue to oppose the penalties.

Now, the Canadian government is in a bid to file a notice of the challenge under the U.S.-Mexico-Canada trade agreement’s dispute resolution system.

The main crux of the U.S. argument is that Canadian softwood lumber producers are dumping their products into the United States at a lower price than American lumber businesses can because they are subsidised. As a result, the United States imposed a duty on all softwood lumber from Canada in order to boost its retail price, encouraging consumers to buy American wood. 

However, Canada is ready to work toward a diplomatic resolution to the protracted conflict.

Read More: How successive governments in US turned Canada into a defenseless country with no policies

But Canada is mistaken. In the cloak of an ally, the US has always hit upon a plethora of Canadian sectors. We know that relations between the United States and Canada have weakened under Donald Trump, but the Biden administration has done little to mend those ties. 

Businesses in Canada are now suffering as a result of the country’s over-reliance on the United States. Certainly, Canada prefers to survive safely under the comfortable blanket of protection provided by its dominant neighbour in the south. Ottawa has no desire to come out of its cocoon.

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