Canada mulling limits on lumber exports to help U.S. trade talks

A top Canadian official says the country is considering cutting back on sending lumber to the U.S. to win over President Trump during trade negotiations.

British Columbia Premier David Eby teased the plan as Canada races against an Aug. 1 deadline to avoid tariffs of 35% on goods it sends to the U.S.

“One of the asks for years out of the American coalition has been a quota — that there’s a fixed amount of lumber that gets to come from Canada,” Mr. Eby told Bloomberg News. “I think that, for the first time, there’s some willingness to have a conversation about what that could look like.”

The U.S. building market is a demanding one, so it relies on lumber imports from Canada to close a gap between that demand and U.S. production.

Mr. Trump doesn’t like that. He says the U.S. has plenty of trees for timber but hemmed itself in with regulatory burdens and slow environmental reviews.

Earlier this year, he directed the government to cut red tape around timber production and boost sales from trees on public lands.

Mr. Trump paired the move with a probe into whether U.S. reliance on imported lumber is a national security concern, setting the table for new tariffs on Canadian lumber as part of his get-tough trade strategy.

“We don’t need their lumber. We don’t need anything that they give. We do it because we want to be helpful, but it comes to a point when you just can’t do that,” Mr. Trump said about Canada in March.

Mr. Trump, who says Canada is so reliant on the U.S. it should become a state, recently told Prime Minister Mark Carney he plans to tax Canadian imports at 35%, effective Aug. 1.

However, the White House is open to changing the terms if Canada can devise better trade terms.

The tariff threat is looming even though Canada made a key concession by canceling its digital service tax on U.S. tech companies.

Mr. Trump says the door is open to negotiation, but he also feels comfortable with imposing tariffs on foreign goods as the cost of doing business with the U.S. market.

He says the tariffs are bringing in plenty of revenue for the Treasury and rebalancing a trade framework that’s unfair to American producers and workers.

His tariff actions are being challenged in court by small businesses and Democrat-run states. They say Mr. Trump swiped powers that belong to Congress and that the tariffs boost costs for import-heavy businesses, which then pay the duties to U.S. customs and consider whether to pass along the costs to consumers.

Mr. Trump and his team say existing tariffs haven’t led to widespread inflation, emboldening them.