In response to the dairy dispute, President Trump has announced the USA will impose a 20 percent tariff on softwood lumber from Canada.
"On the issue of softwood lumber, the Prime Minister refuted the baseless allegation by the U.S. Department of Commerce and the decision to impose unfair duties", a spokesperson for Trudeau said, according to Ottawa's readout of the conversation.
The White House described the call as "amicable". The step escalates an economic battle among neighboring countries that normally have one of the friendliest global relationships in the world.
Canada's currency slid to a 14-month low in Tuesday after U.S. Commerce Secretary Wilbur Ross announced a 20% tariff on Canadian softwood lumber imports, valued at $5.66 billion Dollars, or 1% of Canadian GDP.
Foreign Affairs Minister Chrystia Freeland says she is optimistic a new "win-win" softwood lumber deal can reached in the festering trade dispute between Canada and the United States that threatens to poison the relationship between the two North American neighbours.
"Our action plan on softwood starts with fighting the unfounded claims of the US lumber production lobby and the unwarranted and unfair duties placed on Canadian lumber products", said Christy Clark, Premier of British Columbia. "Because Canada is the largest US trading partner, it's natural that a Canadian trade issue would be top of mind". We will not stand for this.
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Ed Regan, Resource Manager at RY Timber, explained that Canada subsidizes its timber industry and that USA producers pay as much as 20 times more per standing tree.
For President Donald Trump, Canada has become the primary target to get tough on trade. Canada has changed its pricing structure which will enable its dairy industry to provide the ultra-filtered milk needed in cheese production.
The Trump administration pointed out that the imports were unfairly subsidized.
Lumber and dairy disputes have soured trade relations under previous Presidents.
Saskatchewan Premier Brad Wall says Canada needs to be prepared to act as the United States takes aggressive steps in the softwood lumber dispute. Despite remarks from the president and his Commerce secretary, neither lumber nor dairy are actually part of the current NAFTA.