Canada hits back in lumber dispute, threatens action against U.S

Fri May 5, 2017 5:35pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada struck back at the United States over a lumber dispute on Friday, threatening to ban shipments of U.S. thermal coal from Pacific ports and suggesting sanctions against products from Oregon.

Liberal Prime Minister Justin Trudeau says his government will defend the timber industry against what he calls an unfair U.S. decision last month to impose tariffs on exports of softwood lumber.

Trudeau said Ottawa would study whether to stop U.S. firms from shipping thermal coal via the Pacific province of British Columbia. Provincial Premier Christy Clark asked for the ban in response to the U.S. tariffs.

Canada is also considering duties on exports from Oregon such as wine, flooring and plywood, said a source close to the matter, citing Oregon Democratic Senator Ron Wyden's prominent role in pressing for the lumber tariffs.

Analysts said Cloud Peak Energy Inc would be the biggest coal producer affected by a British Columbia ban or levy. Coal is railed to those ports by Burlington Northern Santa Fe Corp, owned by Berkshire Hathaway Inc.

The dispute threatens to cloud talks on updating the North American Free Trade Agreement, which are set to start this year. NAFTA groups Canada, the United States and Mexico.

Washington's imposition of tariffs kicked off the fifth formal bilateral dispute over timber in less than 40 years. U.S. producers say Canadian lumber is unfairly subsidized, a charge Canada has successfully fought in trade tribunals.

British Columbia is a major lumber exporter and says the duties will devastate its industry.   Continued...

Canada's Prime Minister Justin Trudeau speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada, May 3, 2017. REUTERS/Chris Wattie