Canada Slaps Import Duty on U.S. Corn

The Canadian government announced today that it will impose an import duty on corn from the United States, the latest salvo in a growing trade war between the world’s two biggest trading partners.

The Department of Revenue said the duty will be $1.05 (U.S.) a bushel. Corn is currently selling at around $1.75 a bushel on U.S. commodities markets.

The department said it has found evidence that U.S. farm subsidies are injurious to Canadian farmers.

The department said in a statement that after investigating a large number of U.S. federal and state agricultural programs, it found five programs that “confer a subsidy on grain corn.”

In Washington, Agriculture Secretary Richard E. Lyng said he is “astonished and dismayed” over the Canadian action.

No Increase in Exports

Lyng said the U.S. farm program does not fit the “classic definition” of export subsidies. He said subsidies offer lower prices to export customers than to domestic buyers. The U.S. program reduces prices to all customers.

Lyng said U.S. farm programs have not increased corn exports to Canada, which have fallen to between 250,000 and 400,000 tons, down from 650,000 tons in 1980-81.

Canada and the United States have been increasingly at odds over trade. In May, the United States imposed a 35% tariff on Canadian cedar shingle and shake imports because of the damage that the less expensive imports were allegedly causing to U.S. manufacturers, mostly in the Northwest.

In June, Canada took retaliatory measures, restoring previously abandoned tariffs on U.S. books, periodicals, semiconductors and computer parts.

In October, the United States imposed a 15% tariff on soft wood imports, lumber used mainly in building construction.