Canada and the United States had a prolonged dispute about alleged government subsidies to the softwood lumber industry in Canada.Who loses and who gains from the situation in which Canadian governments impose taxes on Canadian exports of softwood lumber to the United States?

Question

Quizplus · Accepted Answer

When Canadian governments impose taxes on Canadian exports of softwood lumber to the United States, the cost of Canadian lumber for U.S. users increases, which means they lose. On the other hand, Canadian producers of lumber benefit from the taxes as they can sell their products in the domestic market at a higher price, and U.S. producers of lumber also benefit as the taxes make Canadian lumber more expensive, giving them a competitive advantage. Therefore, U.S. users of lumber lose while U.S. producers of lumber gain.

Canada and the United States Had a Prolonged Dispute About