WASHINGTON, D.C. — The Trump administration has imposed tariffs on Canadian lumber in the midst of an ongoing dispute over milk from Wisconsin and other states.

 

The April 24 announcement applies to softwood lumber, siding, flooring and certain other coniferous wood, according to the U.S. Department of Commerce (DOC). Last year, imports of softwood lumber from Canada were valued at about $5.66 billion.

 

“It has been a bad week for U.S.-Canada trade relations,” Commerce Secretary Wilbur Ross said after the tariffs were announced last week. “Last Monday, it became apparent that Canada intends to effectively cut off the last dairy products being exported from the United States.

 

“Today, in a different matter, the Department of Commerce determined a need to impose countervailing duties of roughly $1 billion on Canadian softwood lumber exports to us. This is not our idea of a properly functioning free trade agreement.”

 

Early last month, 67 dairies – 58 in Wisconsin and nine in Minnesota – had their contracts canceled by Grassland Dairy Products effective May 1. The Wisconsin-based milk processor told the dairies it made the move due to changes in dairy-related policies in Canada. Some New York dairy farmers also felt the impact.

 

At issue is ultra-filtered – or concentrated liquid – milk. Canada has created a Class 7 milk designation and changed its pricing policies for the product, according to John Pagel, president of the Dairy Business Marking Cooperative, based in Wisconsin. The result of the changes is a higher cost in Canada for U.S. milk products.

 

In an April 18 speech in Wisconsin, President Trump said he would stand up for dairy farmers in the state. “I’ve been reading about it, I’ve been talking about it for a long time, and that demands, really, immediately, fair trade, with all of our trading partners,” he said. “And that includes Canada. Because in Canada, some very unfair things have happened to our dairy farmers and others. What’s happened to you is very, very unfair. It’s another typical one-sided deal against the United States and it’s not going to be happening for long.”

 

Several dairy organizations and agriculture groups asked him to take action against Canada and to tell Prime Minister Justin Trudeau to end the new pricing policy. In a letter dated April 13, the groups – including National Milk Producers Federation (NMPF), U.S. Dairy Export Council and National Assoc. of State Departments of Agriculture – said U.S. dairy exports support about 110,000 jobs in America:

 

“Many (of those jobs) are in farming and food manufacturing, as well as in supporting rural manufacturing and skilled farm service workers. However, for trade to yield its full potential and provide the maximum impact possible in supporting American jobs, our trading partners must hold up their end of the bargain as well.”

 

After Trump’s Wisconsin speech, NMPF said it has “repeatedly stressed that trade must be fair and that all countries should be held accountable when they break the rules. Canada’s repeated disregard for its dairy trade commitments to the United States has left American dairy farmers enduring the severe and unfair consequences.”

 

The Wisconsin Housing and Economic Development Authority (WHEDA) will provide amended loan guarantees to dairy farmers and processors, Gov. Scott Walker announced April 25. The loan guarantees, effective immediately, will help producers and processors “access much-needed capital to address current market conditions,” according to Walker’s office, with “more favorable repayment and collateral terms to farmers and increased guarantees for producers at lower fees.”

 

WHEDA has offered small business loan guarantees since 1983. The guarantees ensure that farmers and businesses have access to low-cost capital while reducing financial risk and exposure to lenders. 

 

The Canadian government disagrees with the DOC’s decision to impose tariffs on its lumber, according to a joint statement from Jim Carr, minister of Natural Resources, and Chrystia Freeland, minister of Foreign Affairs: “The accusations are baseless and unfounded.

 

This decision will negatively affect workers on both sides of the border, and will ultimately increase costs for American families who want to build or renovate homes.

 

“The Government of Canada will vigorously defend the interests of the Canadian softwood lumber industry, including through litigation.”