New Brunswick sawmills are facing an uncertain future after the U.S. administration of President Donald Trump announced tariffs of almost 20 per cent on softwood lumber from the province.
While that number is only preliminary, the U.S. will start charging it to U.S. buyers of Canadian softwood within weeks.
The province’s largest forestry company, J.D. Irving Ltd., managed to secure a lower tariff rate of just three per cent.
But other sawmills are facing the higher rate, which could make the difference between profit and loss.
“That’s going to impact the bottom line of my member sawmills,” said Mike Legere, executive director of the industry group Forest NB.
“What it does is it increases their costs. They don’t want to pass that cost onto their buyers, so they’ll have to absorb that, and that affects their margins. … That’s just untenable for our sawmills.”
Premier Brian Gallant reacted forcefully to the U.S. announcement, calling it “alarming.”
He told reporters bluntly that “Trump’s presidency and his protectionist views and approach is the greatest hazard to the New Brunswick economy.”
But he said governments are limited in what they can do to help the hardest-hit sawmills, because any financial aid might confirm the U.S. view that the industry is subsidized and provoke more trade retaliation.
“It certainly is a very difficult situation,” he said. “Our thoughts are with the businesses, and more specifically the communities and the workers in New Brunswick who depend on the forestry sector.”
There was still a faint hope late Tuesday that New Brunswick would be exempt from the measures, in keeping with a Maritime exemption from U.S. duties that began in 1983.
But Nova Scotia Minister of Trade Michel Samson said the U.S. had apparently decided “to defer consideration of the exemption” for the region as a whole.
The logic behind the exemption was that the forestry sector in the region was not subsidized as it was in other parts of Canada.