News of the Day

The Trump administration announced on Monday that it would impose new tariffs on Canadian softwood lumber imports, escalating a longstanding conflict with America’s second-largest trading partner.

The Commerce Department determined that Canada had been improperly subsidizing the sale of softwood lumber products to the United States, and after failed negotiations, Washington decided to retaliate with tariffs of 3 percent to 24 percent. The penalties will be collected retroactively on imports dating back 90 days.

The decision came days after President Trump complained bitterly about Canada’s dairy trade practices, and the tariffs signaled a harsher turn in his relationship with Canada, even as he seeks to renegotiate the North American Free Trade Agreement. While he has often assailed China, Mexico and others for their trade practices, he seemed to have forged a strong relationship with Canada’s prime minister, Justin Trudeau.

The United States and Canada have been at odds over softwood lumber in one form or another since the 19th century, with the current dispute tracing back to 1982. The United States imported $5.7 billion in softwood lumber last year alone, mainly for residential home building.

At the conflict’s heart is a fundamental difference in forestry ownership. In the United States, forest lands are largely held by lumber companies. In Canada, they tend to be owned by the government, and American mills contend that Canadian provinces subsidize their industries by charging low royalty rates for cutting trees. A temporary truce under President George W. Bush, which effectively limited Canadian exports to the United States, expired in 2015.

Responding on Monday to a complaint filed by American mills, the Commerce Department found that five Canadian companies received subsidies worth 3 percent to 24 percent and ordered equivalent tariffs on each of them. For other Canadian lumber companies, it set a tariff rate of 20 percent. The department will issue a final determination in September.

“The government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty,” Chrystia Freeland, the minister of foreign affairs, and Jim Carr, the minister of natural resources, said in a joint statement. “The accusations are baseless and unfounded.”

Commerce Secretary Wilbur Ross told The Wall Street Journal that the Trump administration had tried to negotiate a settlement but failed. In a separate statement on Monday, he called it “a bad week for U.S.-Canada trade relations,” repeating Mr. Trump’s complaints about dairy exports. “This is not our idea of a properly functioning free trade agreement,” he said.

An Illinois company will not replace its deteriorated 110-mile fuel pipeline between Milwaukee and Green Bay, state Administration Secretary Scott Neitzel said Friday.

West Shore Pipe Line Company in June 2016 permanently shut down the only gasoline and diesel fuel pipeline serving northeastern Wisconsin after testing of the 56-year-old line found extensive repairs were needed. At that time, West Shore representatives said the company was evaluating options for rebuilding the line within two years.

Since that time, state officials have worked with gasoline retail businesses to maintain an adequate fuel supply in the region at a reasonable price for consumers, Neitzel said. No fuel shortages have been reported in that time.

Gasoline retailers hired more tanker trucks and drivers to transport fuel from terminals at Milwaukee, Waupun and Junction City. The terminal at Milwaukee is owned by West Shore. The terminals at Waupun and Junction City added capacity to serve more trucks, Neitzel said.

In addition, the state lifted weight limits for fuel trucks on certain routes into northeastern Wisconsin and the Port of Green Bay began importing diesel and gasoline shipments.

Wisconsin’s manufacturing and agriculture tax credit accounted for almost 21,000 new manufacturing jobs since implementation started in 2013, according to a new study from University of Wisconsin-Madison Professor Noah Williams.

The study also concluded the tax credit accounted for 42,000 total jobs throughout the state.

The analysis, released through the Center for Research on the Wisconsin Economy, looked at job data in Wisconsin counties bordering other states to help isolate the impact of the tax credit before working toward a statewide estimate. Agricultural jobs were not included because of a lack of data at the county level.

Since 2013, manufacturing employment in Wisconsin’s border counties grew 1.9 percentage points faster than in those counties just across the state line, according to Williams.

He also acknowledged the tax credit “was only one part of an overall attempt to change the business climate in Wisconsin, which included changes in unionization, personal taxes, regulation, and becoming a right-to-work state in 2015.”

The tax credit, passed as part of the 2011 state budget, phased in a series of increasing tax credits each year starting in 2013. It was fully phased in starting in 2016 and leaves manufacturers with minimal state taxes.

Opponents of the tax credit have pointed to Legislative Fiscal Bureau estimates showing the policy has reduced state revenues substantially. The most recent estimate suggests a reduction of $1.4 billion from 2013 to 2019, compared to an original estimate of $617 million.

An analysis by the Wisconsin Budget Project showed the state’s manufacturing sector increased employment by 2.1 percent in the two years before and after implementation of the tax credit, even as job growth in other industries increased faster.

Wisconsin Manufacturers and Commerce, meanwhile, used U.S. Bureau of Labor Statistics data to show the state lost 81,800 manufacturing jobs between 2006 and 2010 and gained 34,200 starting in 2011, when the tax credit was first passed.

Williams says state-level data is colored by a variety of factors, and comparisons to surrounding states don’t account for things like population concentration, industry differences and labor force dynamics. The idea behind using border counties is that the economies are generally similar on either side of the line, allowing for a better comparison.