Hard Solutions for Softwood Lumber

by Crista Huff


When a playground bully decides to pummel you with his fists, you commonly have any of three reactions:

  1. You run away from him.

  2. You fight back, to protect your body from potential injury.

  3. You scream for help, and if you’re lucky, other kids and adults will assist in your defense.

Lots of older folks may not be aware of the trend in U.S. public school systems to punish kids who defend themselves when they’re physically attacked at school. I realize that the concept of blaming bullying victims is somewhat incomprehensible, yet students who raise their arms to defend themselves from physical attacks at public schools are commonly suspended from school, receiving a punishment that’s equal to what the attacker receives. Go figure.

We also know that there’s no rationality, no logic in that approach. If we teach our children not to protect themselves from aggressive people, then they will become adults who put up with all manner of bad behavior in the home and workplace because they have not learned right from wrong, to discern appropriate behavior from inappropriate behavior, nor to stand up against injustices.

Is that point clear? I certainly hope so. I can’t even imagine what goes through the minds of people who think it’s a great idea to punish crime victims.

Now that we’re clear on the concept of aggression vs. subjugation, let’s talk about last week’s assessment by the U.S. Commerce Department that Canada has been unfairly dumping and subsidizing softwood lumber that’s exported into the U.S. (And how about if we ignore politics and buzzwords like protectionism, and simply look at facts?) Inside U.S. Trade reported, “Commerce said it determined that exporters from Canada have sold softwood lumber in the U.S. at 3.20 percent to 8.89 percent less than fair value. It also said Canada was providing unfair subsidies to its softwood lumber producers at rates from 3.34 percent to 18.19 percent.”

As a result of unrelenting unfair trade practices, the U.S. is proposing new tariffs on Canadian softwood lumber in the range of 10% to 24%. The tariffs will not be applied to all Canadian softwood lumber companies, but will be focused on those that have been participating in unfair trade practices. The U.S. International Trade Commission will make a final determination on the proposed tariffs in December.

Canadian Prime Minister Justin Trudeau said that the tariffs “represent a burden on forestry workers and communities all across this country.” Well, hello? When you go to great lengths to give financial breaks to an industry for many years, and you’re finally called on the carpet for your behavior, there will, of course, be a backlash that reverberates throughout the industry and its employees! Do we expect the bully in the aforementioned schoolyard scenario to never be punished, simply because punishing him might harm his ego???

No. No matter how long bad behavior has gone on, whether it’s within the venue of international trade or Hollywood casting couches, it should always be the goal to fix the problems and hold the perpetrators accountable.

Will there also be resulting changes within U.S. industries and families? Yes. U.S. lumber companies, such as Weyerhaeuser, will be able to sell their products without constantly worrying which subsequent gifts the Canadian government will bestow upon its own lumber industry. Additionally, the U.S. homebuilding industry will be less able to avail itself of cut-rate Canadian lumber. Therefore, as the apple cart is uprighted, some people will receive benefits and some people will be harmed.

I’m a big problem solver. Yes, there will always be fallout when longstanding situations are changed. And I’m fairly certain that there are many people in my wake who don’t like the fact that I’ve upset many apple carts by solving interpersonal, corporate and legislative problems. But I’m not the one who caused the problems. If you’re angry at the ultimate outcome, don’t blame the problem solver. Blame the people who created the original problem.

Such is the case with international trade abuses. “Protectionism” has become a bad word in recent years. But all “protectionist” really means, in a U.S. context, is prioritizing America’s well-being over other countries’ well-beings. We are supposed to make sure our families, friends, communities, places of employment and country are faring well before we look farther to check on the well-being of other countries, their industries and their peoples. Protectionism has nothing to do with giving the U.S. unfair advantages. But it often has everything to do with correcting other countries’ unfair advantages that are inflicted on the U.S.

I’m glad that U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Commerce Wilbur Ross are focused on fixing trade problems. The media’s not going to like it, and the old guard in Washington D.C. is not going to like it. But fixing problems is always the right thing to do, and for the first time in my life, I have confidence that there are folks in Washington D.C. who are at least nominally focused on patching holes in the U.S. economic framework.


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Crista Huff is a stock market expert and an international trade advocate. She played a significant role in defeating the Trans-Pacific Partnership (TPP) trade agreement, which would have given away U.S. sovereignty. She is also Chief Analyst at Cabot Undervalued Stocks Advisor. Send questions and comments to research@goodfellowllc.com.


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