Canadian Prime Minister Justin Trudeau told President Trump on Tuesday that he would defend his nation’s interests in softwood lumber.
Trudeau refuted what he called the “baseless allegations” backing the Commerce Department’s Monday decision to slap a 20 percent countervailing duty on Canadian softwood lumber imported into the United States, increasing the long-simmering trade tensions between the two neighbors on the issue.
{mosads}Canada’s leader called the duties “unfair” and the Canadian government’s readout of the call between the leaders said the men agreed on the importance of reaching a negotiated agreement over the dispute that goes back to the 1980s.
A readout of the call from the White House offered little insight into the conversation.
“The two leaders discussed the dairy trade in Wisconsin, New York State, and various other places. They also discussed lumber coming into the United States,” the White House release said.
Commerce Secretary Wilbur Ross defended the tariff decision during the White House’s press briefing on Tuesday.
“They are a close ally, they are an important ally, generally a good neighbor,” Ross said. “That doesn’t mean they don’t have to play by the rules,” he said.
“Things like this I don’t regard as being a good neighbor, dumping lumber. And there’s a feeling in the dairy industry that they are a little bit abrupt in the action they took the week before.”
In recent weeks, the United States has argued that Canada protects its dairy industry to the detriment of farmers here.
U.S. officials said Canada is cutting off imports of milk used to make cheese, a charge Canada disputes.
“Canada upholds our international trade obligations. Under the North American Free Trade Agreement, the U.S. has duty-free and quota-free access for milk protein substances, including diafiltered milk. This duty-free and quota free access has not changed,” a spokesperson for Agriculture and Agri-Food Canada said in a statement.
The Canadian readout from the call said that Trudeau and Trump discussed dairy trade between the two nations, which Canada said “heavily favors the U.S.”
Trump tweeted about the issue on Tuesday, saying: “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”
Canada argues that it imports $550 million of U.S. dairy while exporting only $110 million of its own dairy products.
“The prime minister reaffirmed that Canada upholds its international trade obligations, including the North American Free Trade Agreement [NAFTA], under which the U.S. continues to have duty-free and quota-free access for milk protein substances, including diafiltered milk.”
The trade fights with Canada could portend a more difficult renegotiating process for NAFTA, which Trump has said he will either rework or scrap.