You can expect the trade disputes pot will boil a little less vigorously in the second half of the year, but conditions still will be hotter than normal, a trade attorney with lots of experience in U.S.-Canadian relations predicts.
“There will be more predictability in the second half of 2018 than in the first half,” Dan Ujczo of the Dickinson Wright law firm told ProSales. But he also cautioned that “that’s in relative terms. … This is an administration that prides itself on the enforcement cases it brings on.” His advice: Buy from North American sources as much as possible, as the U.S. disputes with Canada and Mexico likely will recede but tiffs with China and others will last much longer.
Columbus, Ohio-based Ujczo (pronounced OOTZ-zo), says he has never been busier as an attorney dealing with trade issues, such as all the requests that industries are making in hopes of seeing their products exempted from tariffs on steel and aluminum. The Washington Post reported recently about a “tsunami” of requests that have been filed.
“We will get some clarity in short order in weeks if not days on country exemptions on steel,” Ujczo said April 17 during his interview with ProSales. “I do expect those countries that have exemptions [a list that includes Canada and Mexico] will keep them. … The Europeans are doing some things in terms of talking about potential agreement that will enable the EU [to reach a deal], and I think the Japanese will get an exemption. I think that will start adding some clarity. I know we won’t see any exemptions for the Chinese and their proxies, for Russia and for Turkey.
Ujczo holds the distinction of being an American who worked in Canada’s Foreign Ministry, where he worked on relations with the U.S. As an attorney, he has continued to be a liaison between U.S. and Canadian government officials, and he works on behalf of companies with trade concerns involving both nations.
Those experiences have given him insights into how both sides see negotiations over a new Softwood Lumber Agreement (SLA) that principally would involve imports of Canadian lumber into the U.S. Roughly one-third of the framing materials used in U.S. housing every year come from Canadian forests.
In late 2017, after the latest SLA expired, the U.S. imposed tariffs on Canadian timber companies averaging 21%. Builders believe tariffs push up housing costs and thus have been pressing the governments to sign a new deal. The National Lumber and Building Material Dealers Association “supports reaching an agreement on the longstanding U.S.-Canada softwood lumber dispute that brings stability and predictability to the pricing and availability of softwood lumber without the imposition of duties,” the association’s issue brief declares. It asks members of Congress to write to Trump administration officials requesting “consideration of the interests of all domestic lumber stakeholders as negotiations with Canada continue on a new softwood lumber agreement.”
The SLA discussions are going on at the same time as U.S., Canadian, and Mexican negotiators are working on an update to the North American Free Trade Agreement (NAFTA). Are the two talks connected? “It depends on who you talk to,” Ujczo said.
“If you talk to the Canadians, they’ll see softwood lumber is separate,” he continued. “They’ve taken great pains to ring-fence that issue. From the U.S. perspective, while NAFTA isn’t specifically targeting softwood lumber, it certainly shapes the tenor and tones of the negotiations. If you just consider that most of the folks negotiating NAFTA are people who have been fighting with Canada for years on softwood lumber, that does create some tension.” U.S. officials at NAFTA talks took particular umbrage at the complaints Canada filed with the World Trade Organization over the latest tariffs.
