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Canada vs United States of America: Tariffs

by Addisyn Brehmer

Some are calling the recent trade conflict between the United States and Canada the “fight over lumberjacks and dairy farmers”, but this conflict could amount to more than a silly squabble. The tariffs placed on Canadian lumber and American milk could foreshadow a change in America’s trade allies. Trump has talked about leaving NAFTA (North American Free Trade Agreement), and this quarrel seems to be pushing him closer to making that decision. At the current time, however, the fate of US dairy farmers selling to Canada and Canadians selling lumber to the US is concerning. These areas of trade have been a source disagreement between the countries for a long time and now the showdown between these allies is taking place.

Canada has taken a swing at the dairy farmers selling to Canada. Canada put a tariff on dairy exports entering from the US. This tariff can be up to three hundred percent, this would effectively keep Canadian dairy prices high. Farmers that sell to Canada have been able to get through a loophole by selling special ultra filtered milk. The seventy-five Wisconsin dairy farmers that have been shipping their milk into Canada under NAFTA have now been shut out of the country. This leaves those farmers with a huge question of where to sell their milk now (Austen). These farmers were left waiting in dread for three weeks, many not knowing if their family farms would continue on in the dairy industry. But after that three week wait the farmers were signed to new facilities. The only problem is that these may be temporary. Most milk plants can not handle any more milk coming in, but for now they do not have to dump milk and waste production (Barrett).

Trump struck back when he put in place a tariff on Canadian softwood lumber exports. The Canadian government has big stakes in this because they own most of the forests in Canada. A significant dent is put in the industry when the US stops buying, since the US buys sixty-nine percent of Canadian lumber exports. The temporary solution for Canada has been an agreement with Washington to continue bringing lumber into the US under tariff taxes. Unless Canada can convince Trump to change his mind they are faced with further extreme tariffs on their lumber traded with the United States (Austen).

This trade dispute obviously has many wondering what the long term effects of the situation will be. Most concerning is what the implications of disrupting or leaving NAFTA could be. The North American Free Trade Agreement is a treaty. This agreement eliminates trade barriers between Canada, the United States, and Mexico. The treaty is meant to give these three countries an edge in the global market and in the European Union. If trump is successful in his executive order for renegotiating NAFTA, Mexico would cut its value added tax. This would cause us to see rises in grocery prices and higher gas prices. A benefit would be that the US would win back manufacturing jobs from Mexico and eliminate some Mexican worker exploitation. The future of trade is uncertain and it may be a while before the countries of NAFTA can come up with a solution to benefit all (Austen).

Works Cited

Amadeo, Kimberly. “6 Ways NAFTA Works.” The Balance, Accessed 3 May 2017.

Austen, Ian, and Peter Baker. “Lumber Tariff Adds Wrinkle to Nafta Talks With Canada.” The New York Times, The New York Times, 25 Apr. 2017, Accessed 3 May 2017.

Barrett, Rick. “Farms Caught in Canadian Trade Dispute Find Buyers for Their Milk.”Milwaukee Journal Sentinel, 27 Apr. 2017, Accessed 8 May 2017.