Tuesday, April 25, 2017
IT BEGINS: Trump Launches His Asinine Protectionist Trade Policy With Some Mega Tariffs
The Trump administration, led by the economically illiterate Donald Trump, is about to announce its first tariffs, which are likely to be the first of many, but these tariffs are whoppers.
U.S. Commerce Secretary Wilbur Ross said on Monday his agency will impose new anti-subsidy tariffs averaging 20 percent on Canadian softwood lumber imports.
Speaking to Reuters by phone a day ahead of the expected announcement, Ross said that the duties would affect $5 billion worth of softwood lumber imports from Canada.
"It's about 31.5 percent of the total U.S. market, so it's a pretty big deal in terms of the Canadian relationship," he said.
A Commerce Department fact sheet on the pending announcement seen by Reuters shows that
West Fraser Mills will pay the highest duties at 24.12 percent, followed by Canfor Corp at 20.26 percent.
Resolute FP Canada Ltd will pay a 12.82 percent duty, while Tolko Marketing and Sales and Tolko Industries will pay a 19.50 percent duty and J.D. Irving Ltd, will pay 3.02 percent.
All other Canadian producers face a 19.88 percent duty, according to the document.
The tariffs will also be retroactive!
The preliminary determination directs U.S. Customs and Border Protection to require cash deposits for the duties on all new imports as well as softwood products imported over the past 90 days.
To remain in effect, however, the duties need to be finalized by Commerce and then confirmed by the U.S. International Trade Commission after an investigation that includes testimony from both sides.
Softwood comes from gymnosperm trees, usually evergreen conifers, like pine or spruce.
According to Diffen, about 80% of all timber comes from softwood. Softwoods have a wide range of applications and are found in building components (e.g., windows, doors), furniture, medium-density fiberboard (MDF), paper, Christmas trees, and much more.
As Don Boudreaux has explained, a country that is subsidizing an industry is on a daily basis bazookaing its own people. To respond to this by instituting tariffs on Americans, so that they can't gain the benefit of the lower subsidized price, is to bazooka the American people in response.
How this will all play out for the consumer is complex. It likely to result to some degree in higher prices for softwood coming from Canada. It also likely to result in less softwood being imported from Canada into the United States, which will put upward price pressure on American produced softwood.
The crony US limber association is giddy and wants more, "We are pleased with this initial outcome and are looking forward to the (next, anti-dumping) duties expected to be announced June 23,'' said Zoltan van Heyningen of the U.S. Lumber Coalition.
at 12:01:00 AM