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Canadian Lumber Industry Essay

675 Words3 Pages

The article talks about the U.S government is intension to lay a tariff on Canadian lumber industry, due to the Softwood Lumber Agreement (SLA) with the US has expire, and the possible consequence will make.

Tariff is the tax given by the government on the goods that are buying from other countries. Since the tariffs is the method of protectionism trade, place the policy on the one side could help the U.S lumber industry, but on the other hand that will become a night mare for Canadian.

The initial condition is clear, follow the contract, Canada’s softwood lumber has agreement with the U.S has created a decade of relative stability on tariffs. On the graph, originally the US domestic price is at P2 level with quantity of Q3-Q2. The join of lumber contract had allow American people buy lumber at the lower price, …show more content…

The US firms now will face more first movement advance, start or expand the firm as soon as possible, the have more power ability to control the market price especially top firms. Given that US consumers face higher prices, they also suffer a loss of consumer surplus that the price of consumer are willing to pay is higher than the producer price. In contrast, domestic producers increase their producer surplus as they receive a higher price than they would have without the tariff. Increased market share also means that jobs will be protected in the domestic economy. However, for Canada, the US accounted for 69% of Canada's softwood lumber exports in 2015，it is the largest market in the world. The Canada are already attempt the relationship with US, it has created the dependences. Tariff will leads to “Rural Canada is going to suffer a lot” ,and lots of forestry workers in Canada will lost job, Canada will step into a recession, which is a period when the economy of a country is doing badly, leads to a general downturn in

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