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Canada hints at trade war with U.S.
REGINA, Canada (AP) -- The Canadian government on Tuesday hinted at an escalating trade war with the United States, with two federal ministers warning of tariffs on American products in retaliation for Washington's policies against Canadian lumber.
Trade Minister Jim Peterson is identifying areas where Canadian tariffs could put maximum pressure on the U.S. economy with minimal damage domestically, two of his cabinet colleagues told reporters attending a Liberty Party caucus in western Canada.
Industry Minister David Emerson used a sports analogy to describe the federal government's willingness to retaliate against its NAFTA partner.
"I have a background from my younger days in hockey. When somebody slammed you into the boards with undue force and aggression, you took their number," Emerson said. "I think we've got to take their number."
The Bush administration imposed the tariffs in 2002 after accusing Canada of subsidizing its lumber industry. Most U.S. timber is harvested from private land at market prices, while in Canada, the government owns 90 percent of timberlands and charges fees for logging.
The warning comes one week after the United States announced it would ignore a decision by a NAFTA panel that found Canadian lumber exports did not harm U.S. producers.
Emerson said Ottawa was trying to "identify a number of products where a tariff on American exports into Canada can be applied without serious damage to the Canadian economy and, hopefully, with maximum impact in the U.S."
Canada is already seeking WTO authorization for billions of dollars in punitive tariffs against U.S. imports and is going before the U.S. Court of International Trade in New York to force the refund of duties.
With more that 80 percent of Canadian exports going to the United States and the countries exchanging $1 billion each day, Canada would need to tread carefully to avoid a crippling trade war.
But the federal government is intent on making its point that U.S. Customs has illegally collected $4.1 billion in tariffs on Canadian softwood since 2002, said Finance Minister Ralph Goodale.
"We want to make sure that whatever option we pursue is effective in making our point ... without at the same time shooting ourselves in the foot," he said.
"Canada has wanted to make it very clear that we are not happy with the position of the United States to simply ignore what is a clear NAFTA ruling in Canada's favor," Goodale said.
One particularly tough measure has already been ruled out: imposing export quotas on Canadian oil going to the United States. Emerson, who initially supported the idea when he was a lumber industry executive, now says it would unfairly saddle the western oil producing province of Alberta with the bulk of the economic fallout.
"We are stronger as a country when we pull together in a unified way," he said.
REGINA, Canada (AP) -- The Canadian government on Tuesday hinted at an escalating trade war with the United States, with two federal ministers warning of tariffs on American products in retaliation for Washington's policies against Canadian lumber.
Trade Minister Jim Peterson is identifying areas where Canadian tariffs could put maximum pressure on the U.S. economy with minimal damage domestically, two of his cabinet colleagues told reporters attending a Liberty Party caucus in western Canada.
Industry Minister David Emerson used a sports analogy to describe the federal government's willingness to retaliate against its NAFTA partner.
"I have a background from my younger days in hockey. When somebody slammed you into the boards with undue force and aggression, you took their number," Emerson said. "I think we've got to take their number."
The Bush administration imposed the tariffs in 2002 after accusing Canada of subsidizing its lumber industry. Most U.S. timber is harvested from private land at market prices, while in Canada, the government owns 90 percent of timberlands and charges fees for logging.
The warning comes one week after the United States announced it would ignore a decision by a NAFTA panel that found Canadian lumber exports did not harm U.S. producers.
Emerson said Ottawa was trying to "identify a number of products where a tariff on American exports into Canada can be applied without serious damage to the Canadian economy and, hopefully, with maximum impact in the U.S."
Canada is already seeking WTO authorization for billions of dollars in punitive tariffs against U.S. imports and is going before the U.S. Court of International Trade in New York to force the refund of duties.
With more that 80 percent of Canadian exports going to the United States and the countries exchanging $1 billion each day, Canada would need to tread carefully to avoid a crippling trade war.
But the federal government is intent on making its point that U.S. Customs has illegally collected $4.1 billion in tariffs on Canadian softwood since 2002, said Finance Minister Ralph Goodale.
"We want to make sure that whatever option we pursue is effective in making our point ... without at the same time shooting ourselves in the foot," he said.
"Canada has wanted to make it very clear that we are not happy with the position of the United States to simply ignore what is a clear NAFTA ruling in Canada's favor," Goodale said.
One particularly tough measure has already been ruled out: imposing export quotas on Canadian oil going to the United States. Emerson, who initially supported the idea when he was a lumber industry executive, now says it would unfairly saddle the western oil producing province of Alberta with the bulk of the economic fallout.
"We are stronger as a country when we pull together in a unified way," he said.
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