Lumber industry 'deeply disappointed' by Mark Carney's silence on Donald Trump's tariffs

While several business leaders hailed the mutually flattering and friendly tone of this week’s meeting between Prime Minister Carney and U.S. President Donald Trump and their respective trade teams, some sectoral and union leaders were dismayed that little concrete action was achieved.

Luc Theriault, co-chair of the Canadian Lumber Trade Alliance, said in an interview that the Carney government has paid “lip service” to the need to resolve lumber tariffs in recent months, while telling the industry to co-ordinate their positions and form a common front.

But when Carney went to Washington Tuesday, the prime minister was publicly silent on 35-per-cent lumber tariffs that are set to rise to 45 per cent next week and which Theriault says are a blow to the sector.

“We’re deeply disappointed,” Theriault said.

“I don’t know if they don’t have the courage” to insist it is a Canadian priority to resolve, he said, or if it really is not a priority for Carney’s government.

But the lumber industry does not believe resolution of softwood tariffs should wait until a broader review of the Canada-U.S.-Mexico trade deal next year, he said.

Theriault said if indirect impacts are included, the lumber sector supports 400,000 workers, and it is being battered right now. If tariffs rise to 45 per cent next week, as Trump has announced, companies cannot be profitable and will be forced to shut down.

Theriault is president of Domtar’s wood product division, which employs 8,000 workers, and said the lumber alliance represents about 90 per cent of the softwood lumber exports to the U.S.

He said the alliance put forward negotiating advice to Carney, and yet saw no indication their concerns were given voice in Washington.

Neither Carney nor Trump mentioned the industry when they faced media in the Oval Office.

“This is nonsense,” said Theriault. He said the American lumber lobby is a powerful influence in Washington, but there are substantive arguments to reject Trump’s claim that America does not need Canadian wood products.

The American industry produces 70 per cent of what the U.S. needs and consumes, while Canadian wood products amount to 25 per cent and European wood represents a five per cent slice of that market, he said.

“There’s no world in which the U.S. is self sufficient,” said Theriault, despite Trump’s claim the U.S. has all the trees it needs.

“It takes more than trees. You need loggers. You need truckers. You need sawmills, people need to invest in something. You need pulp and paper mills to consume your chips. You need energy plants (that) consume the shavings, the chips. It took decades for Canada to build that.”

Theriault said the Liberal government’s plan to build more homes in Canada and use Canadian wood “is going to take a long time,” require a large number of workers Canada doesn’t yet have, and its offer of loan support for companies affected by tariffs is “not the solution.”

“We need an environment where we can compete,” he said, adding that it will take “years” before the Canadian industry can diversify its wood export market to other countries.

Carney told a conference Wednesday that his government expects to reach “some bilateral deals” on aluminum, steel and energy to address U.S. tariffs “alongside” efforts to prepare for next year’s scheduled review of the continental trade pact.

In briefing the blue-chip audience, the prime minister did not mention lumber, softwood exports or finished wood products that are also the target of American import duties. 

“It appears we are about to hive off steel, aluminum and energy, the very materials the U.S. needs to run its industries, with the goal of settling those first,” said Unifor national president Lana Payne in a statement. “Any privileged access to these resources must be tied to progress in other areas. The concern is that we’ll use much of our leverage without securing deals on auto, softwood and other key sectors likely to face tariffs in the coming months.”

Carney did talk about his strategy for the Canadian auto sector on Wednesday, saying he will continue to argue to Trump that the U.S. auto sector will be more “fully competitive” globally if the continental auto supply chain is supported.

Goldy Hyder, head of the Business Council of Canada, believes any sectoral tariff relief for Canada is likely to come not within days, but within a couple of months, according to talks he’s had in Washington. He said China and Canada are the more complex trade deals the U.S. is juggling and likely to be left for last. However, Hyder was very concerned about the language he heard from Trump and Lutnick this week about the future of Canada’s auto sector.

“That’s disturbing, and I’m allowing myself to believe this is just posturing. It’s just the usual rhetoric and negotiations before anything even starts. But the idea that we don’t need Canada, we don’t need Canada and Mexico,” and the suggestion Trump could do separate deals with the two is “a very bad outcome for Canada, because America becomes the hub and Mexico and Canada become the spokes, so foreign investment will go straight to the United States of America.”

In response to the Star’s questions about whether LeBlanc raised concerns about the lumber tariffs in his meetings with Trump or Lutnick, a spokesman for LeBlanc did not directly reply. Gabriel Brunet said the government is focused on a “new economic and security relationship with the United States that empowers our workers and businesses, and builds strength in our strategic sectors.”

Likewise, Carney’s spokesperson Audrey Champoux on Thursday did not directly reply to specific questions but pointed to the prime minister’s comments in the House of Commons a day earlier, that the government is in active discussions with the U.S. “on many sectors, including softwood lumber, and we will not accept anything less than the best deal for Canadian workers and industries.”

The U.S.-Canada-Mexico free trade deal allows for certain national security exemptions to tariff-free trade, and since he took office Trump has wielded national security provisions in U.S. federal law to levy import tariffs on foreign-made steel, aluminum, autos and auto parts, truck, energy, copper, and lumber, and wood products.

He’s threatened tariffs on pharmaceuticals and other products like heavy trucks and foreign films as well.

Trump’s Commerce Secretary Howard Lutnick warned Wednesday there will be no zero-tariff deal for the auto sector, because Trump is determined that the U.S. will dominate car-making.

Lutnick, speaking to a closed-to-media session at a Canada-U.S. trade conference organized by the Eurasia Group and BMO, said Canada must recognize “America is first, and Canada can be second,” according to sources who attended the session.

“Car assembly is going to be in America and there is nothing Canada can do about it. The question is, what is Canada going to do instead,” multiple sources reported Lutnick saying. They said Lutnick urged Canada to leverage its proximity to the U.S. to draw new tech, mining and other investments.

In an interview with The Economist published Thursday, Carney said Canada is among many countries hit by U.S. tariffs, but the bigger impact than the immediate tariff hit has been “the uncertainty” that is scaring off global investment around the world.

He said Canada and other countries are trying to adjust by forming new trading alliances. When the interviewer asked if he felt there could be a rules-based trading system without the U.S., Carney replied there already is one; “It’s called the WTO” — the World Trade Organization which Trump has defied.

Carney suggested global trading patterns are shifting to a system where countries will have “tighter integration with countries that you share a broader range of values … To be clear, it’s not as efficient as the trading system that had been in place, but that system is over and the question is what do we construct” next,” he said.

Asked if he believes the U.S. will remain a high-tariff jurisdiction even after Trump is no longer in office, Carney said “Yes is the short answer.”