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“This move shouldn’t be seen as anything other than a shakedown,” said Duncan Davies, chief executive of Vancouver-based Interfor Corp. Two-thirds of his company’s production are in the U.S., and that perspective enables him to see the U.S. claims as without merit, he said. “Log costs are significantly less in some regions of the U.S. than in Canada.”

The dispute will have serious consequences for Canada’s lumber industry, which contributes about one per cent of Canada’s gross domestic product. After the lumber duties were announced, the Canadian dollar dropped nearly half a cent to 73.56 U.S. cents, its lowest level in 14 months.

“If we look at the history of these trade actions, there inevitably will be job losses,” said Jim Carr, Canada’s federal minister of natural resources. “It is going to result in some tough times for some operators across the country.”

Prime Minister Justin Trudeau said Tuesday that “thickening” the border is not in the interests of either country.

“We are tremendously interconnected in our economy with that of the United States, but it’s not just a one-way relationship,” Trudeau said. “There are millions of good U.S. jobs that depend on a smooth flow of goods, services and people back and forth across our border.”

This move shouldn’t be seen as anything other than a shakedown

In a preliminary ruling that will be finalized in September, the U.S. Commerce Department applied specific tariff rates to several companies: Canfor Corp., 20.26 per cent; J.D. Irving Ltd., 3.02 per cent; Resolute Forest Products Inc., 12.82 per cent; Tolko Industries Ltd., 19.5 per cent; and West Fraser Timber Co. Ltd., 24.12 per cent. All other Canadian producers shipping softwood lumber to the U.S. will face a blanket tariff of 19.88 per cent.