National Review Online
Wednesday, April 26, 2017
Donald Trump wants to take the Canadians to the woodshed.
The Trump administration has announced that it intends to
impose a silly and potentially destructive retaliatory tariff on imports of
some Canadian timber, which U.S. timber companies insist — contrary to the
facts — is unfairly subsidized by the Canadian government.
This is, unhappily, as familiar as it is foolish.
The U.S.–Canada “soft”-wood dispute (“soft” wood means
wood from conifer trees) is very old, and it stems from the fact that timber is
harvested differently in the two countries: In the United States, most timber
is harvested on price land, where the “stumpage” price is relatively high; in
Canada, most timber comes from Crown (i.e., public) lands, where costs are
determined through an auction system, meaning that they reflect market rates.
Canada is a big place with lots of trees and a population the size of
California’s — and, as it turns out, it is a little less expensive to harvest
wood in that context.
Wilbur Ross, the secretary of commerce, says that this
dispute shows that the North American Free Trade Agreement is not working as it
should. What it has shown is in fact the opposite: The question of Canadian
timber subsidies has been challenged by the United States under both NAFTA and
the World Trade Organization, and in both cases there were credible,
fair-minded studies that concluded the U.S. complaints were without merit. That
is exactly how these trade accords are supposed to work — but, sometimes, U.S.
business interests will lose. And, sometimes, they deserve to.
The Trump administration is not the first to go down this
road. The George W. Bush administration did the same thing, and it also
presaged Trump’s fixation on steel imports. That did not start a destructive
trade war, as critics feared, but neither did it achieve anything of real
substance to benefit the U.S. economy. It is ordinary populist nonsense.
But the thing about populism is, it is popular.
Unless you buy a lot of wood. If you are a homebuilder,
then the Trump administration is simply going out of its way to make your raw
materials more expensive, taking the wood to your bottom line. Trump used to
sympathize with those who put up buildings. But there are nefarious Canadians
to be policed.
If this is simply Trump revisiting dumb ideas from
previous administrations, then that is unfortunate but not unexpected. If this
is the opening salvo in a campaign against NAFTA and the WTO, then that is another
matter entirely, and a much more serious one. For the moment, there is not much
reason to believe that this is much more than shallow symbolism in the service
of populist rhetoric.
But shallow symbolism is not without costs. Tariffs are
not a tax on foreigners. They are a tax on American consumers and, in the case
of raw materials such as timber, a tax on American producers, too. They are a
tax on American workers and a brake on the productivity of those workers. How
many construction jobs would the Trump administration be willing to sacrifice
in the cause of looking tough on . . . Canada?
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