(Adds White House statement, paragraph 5)
By David Ljunggren
OTTAWA, April 25 The United States and Canada
faced off on Tuesday in a renewed battle over softwood lumber
that threatened to spill over into multiple other sectors,
though President Donald Trump said he did not fear a trade war.
Canada vowed to resist Washington's move on Monday to impose
tariffs on lumber that mostly feeds U.S. homebuilding, noting
trade authorities have consistently sided with Ottawa in the
Prime Minister Justin Trudeau called Trump on Tuesday to
reject "the baseless allegations" against Canada's industry and
the "unfair decision" to impose tariffs, said a statement from
"The Prime Minister stressed the government of Canada will
vigorously defend the interests of the Canadian softwood lumber
industry," said the statement, which nevertheless added both men
agreed that a negotiated settlement was important.
A White House statement said the two leaders had a "very
amicable call" about lumber imports and the U.S.-Canada dairy
The heated rhetoric came amid fresh attacks from the U.S.
president against Canada's dairy industry, and just two months
after the two leaders held a warm meeting where Trump said the
bilateral trade relationship only needed "tweaking."
"People don't realize Canada's been very rough on the United
States ... They've outsmarted our politicians for years," Trump
said during a meeting with agricultural leaders.
"We don't want to be taken advantage of by other countries,
and that's stopping and that's stopping fast," he added.
Washington said Monday it will impose preliminary
anti-subsidy duties averaging 20 percent on imports of Canadian
softwood lumber, a move that affects some $5.66 billion worth of
The affected Canadian firms are West Fraser Timber Co Ltd
, Canfor Corp, Conifex Timber Inc,
Western Forest Products Inc, Interfor Corp and
Resolute FP Canada Ltd.
Shares in Canadian lumber companies rose as the level of the
new tariffs came in at the low end of what investors were
expecting. Canada's main stock index notched a
The two countries found themselves on a collision course
over lumber -- a subject that has irritated bilateral relations
for decades -- after a previous agreement had expired.
In a telephone call earlier in the day with the premiers of
Canada's 10 provinces, Trudeau said Ottawa would use litigation
to press its case, a separate statement from his office said.
Natural Resources Minister Jim Carr said Canada was mulling
options such as a World Trade Organization or NAFTA challenge,
and would help companies and workers who lose their jobs because
of the tariff.
POINTING AT NAFTA
The tensions, which follow comments by Trump about Canada's
"unfair" dairy system, sent the Canadian dollar to a 14-month
low as investors braced for tense negotiations with Canada's
U.S. Commerce Secretary Wilbur Ross on Tuesday called Canada
a close ally, but said that did not mean Canadians do not have
to play by the rules. Ross said that while no immediate further
actions were being contemplated, the disputes point to the need
to renegotiate the North American Free Trade Agreement sooner
rather than later.
Canada's Carr rejected any suggestion that Canada was not
playing by the rules.
"Independent trade panels have repeatedly found these (U.S.
lumber) claims to be baseless. We have prevailed in the past,
and we will do so again," he told a news conference.
The two countries and Mexico are preparing to renegotiate
the 23-year-old NAFTA.
Canada's share of the U.S. lumber market has ranged from 26
percent to 31.5 percent since 2006, when the countries signed an
agreement, down from 34 percent, before that, said Duncan Davies
of lumber producer Interfor Corp.
"For us, (U.S. tariffs are) a negative effect on our
Canadian business, but the real loser in all of this is the U.S.
homebuilder and U.S. consumer ... That's why we think this is
such a misguided effort," Davies said.
A U.S. homebuilder group called the ruling "shortsighted."
Canadian Trade Minister Francois-Philippe Champagne, in
China to boost sales of softwood lumber, said there had never
been a better time to diversify exports.
"There is enormous potential," he said from Beijing, citing
heavy Chinese demand.
(Additional reporting by Leah Schnurr in Ottawa, Alastair Sharp
and Fergal Smith in Toronto, Rod Nickel in Winnipeg, Allison
Lampert in Montreal and Eric Walsh in Washington; Writing by
Andrea Hopkins; Editing by Jonathan Oatis and Sandra Maler)