The never-ending softwood lumber dispute heats up
It’s happening again.
“Made in America. I mean it. Lumber, glass, drywall, fiber-optic cable.”
With those words, U.S. President Joe Biden has stoked the embers of the softwood lumber dispute for the nth time, calling for the rebuilding of the nation’s crumbling infrastructure using exclusively American materials in federal projects.
Canadian manufacturers are concerned, and rightly so. Another group that should be concerned is American taxpayers, as should the firms bidding for government infrastructure contracts in the United States.
That’s because the sort of protectionist policies being promoted with slogans such as “Buy American” are designed to give a leg up to certain local producers… at the expense of local consumers, and other producers as well.
And these expenses aren’t small either. In 2017, it was estimated that duties on imported wood products cost American consumers $1.6 billion in reduced economic well-being. On this side of the border, the cost was pegged at $60 million.
This can be explained both by the extra cost being passed unto consumers, as well as projects not going forward or being scaled back because of higher costs.
That’s the thing when it comes to trade: it’s never a zero-sum game. When people and institutions trade goods and services with one another, they do so because it’s in their mutual interest, as both producers and consumers find something in it for them. They don’t need national governments to meddle in the process.
And while it’s unclear yet whether those were just rhetorical flourishes in a long-winded official speech, both Canadians and Americans should be on guard whenever the flames of protectionism are getting fanned by government officials at the highest levels.