The Canadian dollar has slumped to the lowest point of the year on the news that the United States is considering new tariffs on imports of lumber. The Trump administration will impose new tariffs on imports of Canadian softwood lumber after concluding that Canada subsidizes the industry in a way that hurts the US. Wilbur Ross, President trump’s trade secretary and assigned to bring down the US trade deficits told the Financial Times that the United States would place countervailing duties ranging from 3 to 24 percent on five Canadian lumber exporters. These companies are Canfor, J.D. Irving, Resolute FP Canada, Tolko Marketing and Sales and West Fraser Mills. He added, “This has been another longstanding dispute with Canada….These duties will be applied retroactively, 90 days backward because they were on notice that this was forthcoming and they didn’t change the practice of dumping subsidized lumber.”

Canada’s lumber trade with the United States is worth $5 billion and Canada’s share in the US lumber market is about 31.5 percent. The Canadian government has called the proposed tariffs as unfair and punitive.

As the news breaks out, the Canadian dollar declined to the weakest point since December 2016. The Canadian dollar declined is currently trading at 1.357 per dollar.