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Trump’s trade actions bring uncertainty to Canadian lumber country

Trump's trade actions echo in lumber country

MADAWASKA, Ont. — It didn’t take long for Donald Trump’s new tariffs on softwood lumber to echo in Ontario’s Madawaska Valley â€” a forestry-dependent area almost exactly 1,000 kilometres due north of the U.S. capital.

The unease settling into the region, which is dotted by sawmills vital to the local economy, is not only tied to the U.S. president’s move this week to impose retroactive duties averaging 20 per cent.

There are also fears about what might come next from the Trump administration. 

Some believe another wave of bad news could come in the form of a separate anti-dumping duty on softwood, the renegotiation of the North American Free Trade Agreement or a proposed border tax on all imported goods.

“All of these communities are dependent on the forest-products industry, even if people aren’t working directly in the sawmills or in the bush,” said Ted Murray, vice-president of the 115-year-old Murray Brothers Lumber Company in Madawaska, about 220 kilometres west of Ottawa.

“Employees and just regular folks in the community are certainly concerned about this — and not only this trade action but the entire sort of philosophy that the new regime in Washington seems to be putting forward.”

Other regions of the country that ship more softwood south of the border may absorb bigger hits from the latest U.S. move in the long-running dispute. 

But the changes are still expected to hurt the small- and medium-sized companies here, including Murray Brothers despite the firm’s best efforts in recent years to soften the blow.

The company, which employs about 100 people, has lowered its inventories and shifted more of its business away from the U.S. market — towards East Asia and the Middle East. 

However, about 10 per cent of the company’s softwood exports are still shipped to the U.S. and Murray expects the new duty to make such sales “pretty much unprofitable.”

For the most part, he expects the bigger lumber companies with investments in the U.S. and the smaller firms with more versatility and lower costs to fare better.

Even with the challenges, he doesn’t expect any layoffs at Murray Brothers, where saws buzzed Tuesday and workers stacked fresh shipments of pine boards. 

It might be a different story for other operations with more exposure to the U.S., Murray said.

“In the industry, there will be some fallout, there will be jobs lost,” said Murray, whose grandfather and great-uncle co-founded the company.

“Obviously, we’re depending on our government to challenge the tariffs.”

Ottawa has condemned the U.S. administration’s move, calling it unfair and baseless. On Tuesday, Prime Minister Justin Trudeau told Trump during a phone call that his government would “vigorously defend the interests of the Canadian softwood lumber industry,” according to a statement released by his office.

Shelley Maika, a second-term councillor in the Township of Madawaska Valley, said Ottawa and the provinces have to step up for the forestry sector.

Locally, Maika said the lumber industry is easily the top employer. She added it has endured many challenges, but had begun to rebound in recent years.

“Anything negative to that is not going to be good for us and it’s a huge concern,” said Maika, who believes Trump’s actions this week have started to resurrect old anxieties from past softwood disputes.

“The issues that that president is bringing forward, of course, (are) definitely going to cause nervousness and uncertainty.”

Maika, whose partner works in the lumber industry, also worries that companies will hold back from making investments amid all the unknowns.

Outside the local hardware store Tuesday in the Madawaska community of Barry’s Bay, former forestry worker John Artymko noted how international tribunals in the past have ruled in favour of the Canadian system.

“Whether it’s political points they’re looking for the in States, I’m not sure — I think any country would take whatever they can get,” Artymko said before heading into the store.

“But it puts a lot of strain on people… A lot of stress on families, a lot of stress on communities that doesn’t have to be there and many of them are unwilling pawns, in my mind, for political gains somewhere down the road.”

— Follow @AndyBlatchford on Twitter

Andy Blatchford, The Canadian Press

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