U.S. trade policies cast shadow of uncertainty over Canadian forestry industry

Photo: The Canadian Press

Softwood lumber is pictured along the Fraser River in Richmond, B.C., Tuesday, April 25, 2017. THE CANADIAN PRESS/Jonathan Hayward

U.S. President Donald Trump’s shifting trade policies are creating uncertainty for the Canadian forestry industry.

Sean McLaren, president and chief executive of West Fraser Timber Co. Ltd., says the potential inflationary effects of tariffs could weigh on future demand.

McLaren made the comments Wednesday during a conference call with financial analysts to discuss the forestry company's latest results.

U.S. tariffs on Canadian and Mexican imports went ahead on March 4, but were followed shortly after by an exemption on goods subject to the free trade agreement between Canada, the U.S. and Mexico.

However, Trump wants to increase domestic lumber production and has directed the U.S. Commerce Department to investigate the potential harms lumber imports could pose to national security.

The department is also conducting its sixth administrative review of softwood lumber duties. RBC analyst Matthew McKellar said in a note Tuesday that if the department’s preliminary determination from that review goes ahead, countervailing duty rates will more than double for most producers.