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US-Canada Trade Relations Strained by Softwood Lumber Dispute

The US plans to increase duties on Canadian softwood lumber, escalating a long-standing trade dispute. Canada's federal government has expressed strong disapproval and readiness to contest the decision.

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Sakchi Khandelwal
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US-Canada Trade Relations Strained by Softwood Lumber Dispute

The United States-Canada trade relationship has once again been rocked by the escalating dispute over softwood lumber. The U.S. Department of Commerce has announced its intention to hike duties on Canadian softwood lumber from 8.05 percent to 13.86 percent, a move that has drawn sharp criticism from the Canadian federal government.

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Canada's Reaction to Increased Duties

International Trade Minister Mary Ng has lambasted the U.S. decision, describing it as disappointing and unwarranted. The Canadian government has pledged to challenge the U.S. move through all available channels, including litigation via existing trade agreements, the World Trade Organization, and the U.S. Court of International Trade. The government has also expressed readiness to engage in negotiation aiming for a resolution to this long-standing dispute.

Impact on Housing Affordability and Supply

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The disagreement over softwood lumber duties is not a new phenomenon in U.S.-Canada trade relations. It has been an economic thorn in the side of both countries for decades. The Canadian government has underscored the negative implications of the increased duties on housing affordability and supply, especially in the U.S., where this could exacerbate existing housing issues.

British Columbia Joins the Fray

British Columbia, Canada's largest softwood lumber-producing province, has joined the federal government in expressing disappointment over the U.S. decision. The province's officials and industry representatives have highlighted the detrimental effects of the unjustified duties on B.C.'s softwood lumber exports to the U.S. They also stressed the wider implications of tariffs on lumber and building material costs amid housing affordability crises in both countries.

The ongoing dispute highlights the complexities and sensitivities of trade relations between these two neighboring nations. As the situation unfolds, the willingness and ability of both countries to engage in dialogue and seek a mutually beneficial resolution will be critical in mitigating the economic impact and fostering a more stable trade environment.

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