Photographer: Abigail Saxton/Bloomberg

U.S. Duties Will Drive Canadian Wood Exports to China, Minister Says

  • Trade Minister Champagne says export opportunity is ‘enormous’
  • Canada in exploratory talks with China on free trade agreement

A rise in U.S. tariffs on Canadian softwood will help drive an increase in lumber exports to China and other Asian markets, Canada’s top trade official said.

“There’s an enormous opportunity,” said Trade Minister Francois-Philippe Champagne in an interview in Singapore on Monday. “Diversification is the key, that’s why Canada has an ambitious trade agenda.”

With other Canadian industries also bracing for increased U.S. tariffs, Champagne will travel to South Korea next week as the north American nation tries to boost trade and stimulate its economy. Natural Resources Minister Jim Carr is scheduled to accompany Canadian forestry leaders on a visit to China in June.

Canada’s diplomatic push comes after U.S. President Donald Trump reignited a decades-old dispute last month by slapping duties as high as 24 percent on Canadian softwood. One of several trade disputes between the U.S. and Canada, Trump also threatened to take action against Canadian dairy farmers over what the U.S. says are unfair agricultural subsidies.

Canadian Prime Minister Justin Trudeau has said he would consider banning thermal coal shipments from the U.S.

Growing Need

Champagne said Canada’s lumber pitch resonated in China and other Southeast Asian countries because softwood was an environmentally friendly building material that could satisfy a growing regional housing need without driving up greenhouse gas emissions.

“What the Chinese were saying is you’re providing a much-needed solution that the Chinese side needed,” Champagne said. “This is beyond selling. This is about working together to tackle a challenge for them.”

Canada exports about $3.5 billion in total forest products to China annually, including about $1.9 billion in lumber, according to China’s official Xinhua News Agency. Over the past decade, Canadian forest product exports to China have climbed to 15 percent from 5 percent of the country’s total forestry exports.

Canada and China are in exploratory discussions on whether to pursue a free trade agreement, Champagne said.

(Corrects status of trade talks in deck headline and final paragraph.)
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