In another round of new trade tariffs, the U.S. government has targeted imports of softwood lumber from Canada, which supplies up to a third of the lumber used in the United States, mainly for home construction. The move comes on the heels of new tariffs on imported steel, and it bolsters tariffs on Canadian lumber imposed last year.
The reason why a free-trade administration would choose to use tariffs as a trade weapon is simple. Free trade requires that trading partners play fair. Items sold abroad must be sold at a fair market price that represents the cost of production, marketing and shipping.
But the Commerce Department says the Canadian government unfairly subsidizes its lumber producers by charging low fees to cut timber on government-owned land and by allowing producers to sell below cost.
Free trade is not based on buying products from other nations at prices that compete unfairly with U.S. producers. Until our trading partners learn that we are serious about free trade, they can expect to see retaliation in the form of stiff tariffs.