Canadian Lumber Case Study Summary

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Recommended: Free trade v/s protectionism

Implications The constant battle between Canada and US and the tariffs that were put on the Canadian lumber had negative consequences on the economy and employment. If the US never put trade barriers in the first place, it would very beneficial for both economies. In this case, from the US perspective, the price of the lumber would go down (since it doesn’t include the tariff); the US consumers/firms would enjoy the lower price. By having decreasing the lower input cost, American firms would expand their production and enjoy higher profits. On the other hand, Canadian producers would focus on producing more lumber; by having no constraints on the current account, this will allow the Canadian lumber industry to increase production and enjoy

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