The softwood lumber dispute between Canada and the US is threatening to break into an all-out trade war following a ruling by the World Trade Organisation (WTO) favouring America.
Canadian officials were reportedly angry after the WTO ruled that the US had acted within international law when it imposed duties totalling billions of dollars on Canadian lumber imports. They are now planning an appeal to the Court of International Trade.
The decision has increased rumours of an escalation in the dispute, with Canada still considering the possibility of imposing retaliatory tariffs on American imports.
The ruling follows a string of successes for the Canadian side, most recently a decision by a North American Free Trade Agreement (NAFTA) panel which dismissed Washington’s claims that Canadian lumber imports were subsidised.
However, the US rejected the earlier NAFTA decision, saying it did not take into account a 2004 ruling by the US-based International Trade Commission.
