2017.04.2608:25:00UTC+00Us Under Trump Series: Lumber Crash Between Trudeau and Trump

The relations between the two biggest neighbors in North America deteriorated after the Trump administration in the United States decided to impose countervailing duties ranging from 3-24 percent on five Canadian lumber exporters to the United States. The Trump administration is also considering duties on dairy products from Canada.

White House reported on Tuesday evening that the President Donald Trump and the Canadian Prime Minister Justin Trudeau had discussed the dairy trade as well as the lumber. Though the White House reported that the call was amicable, on Monday Mr. Trudeau refuted baseless allegations from the United States that the lumber is being subsidized and pledged to vigorously defend Canada’s softwood lumber industry. President Trump earlier on Tuesday hit out at Canada over the dairy trade, threatening to broaden his actions beyond lumber. The US president said on Twitter that Canada had made business for the dairy farmers in Wisconsin and other border states very difficult. The comments came after a dairy dispute bubbled up last week when Canada pledged to support domestic dairy farmers, who can sell their ingredients to Canadian cheese makers and yogurt producers for less than equivalent imports. At a meeting with United States’ farmer and agricultural leaders, President Trump said that people do not realize that Canada has been very rough on the United States.

Until now, it was thought that Canada, due to its historical good relations with the United States would be able to get an exemption from the Trump administration’s determined aim to balance the United States’ trade deficits with the world. The United States is Canada’s biggest trading partner; their annual trade amounts to $545 billion.

The Canadian dollar suffered a major blow as the news broke out and it reached the weakest point for 2017. The Canadian dollar is currently trading at 1.359 against the dollar, the weakest level since December.