Canada strikes cautious, wait-and-see approach on Biden's latest Buy American gambit

British Columbia's lumber industry is anxiously parsing U.S. President Joe Biden's latest Buy American language to better understand the implications for Canadian exporters.

The B.C. Lumber Trade Council says it's "concerning'' that Biden says he wants to restrict the use of foreign lumber in federally-funded infrastructure projects.

Biden announced the expanded rules during Tuesday's state of the union speech on Capitol Hill.

"Buy American has been the law of the land since 1933. But for too long, past administrations have found ways to get around it. Not anymore," he said.

"Tonight, I'm also announcing new standards to require all construction materials used in federal infrastructure projects to be made in America. American-madelumber, glass, drywall, fibreoptic cables. And on my watch, American roads, American bridges, and American highways will be made with American products."

Council president Linda Coady says the U.S. was only able to produce about 70 per cent of its overall lumber demand in 2021, a gap she says was largely filled by imports from Canada.

Canadian producers have long been at the centre of a decades-long trade dispute with the U.S. over anti-dumping duties it imposes on softwood lumber from north of the border.

"This is concerning, and we are seeking to better understand what this means for Canadian producers,'' Coady said of Biden's announcement.

"Our focus remains on working on both sides of the border to maximize the opportunity Canada has in providing the sustainably produced, low-carbon lumber products we know American homebuilders, consumers and construction workers want and need.''

CBC News is tracking B.C.'sforestryjob losses in 2023. Tap onthe map below to learn more about closures and curtailments:

Cautious approach from construction industry

Meanwhile, construction industry advocates, business leaders and suppliers in Canada are taking a cautious, almost sanguine approach to Biden's salvo against the use of foreign building materials in federally funded infrastructure projects.

That his "Buy American" lines conjuresmore frown lines than full-on terror north of the border these days, a sign that a measure of stateside protectionism is now baked in to the reality of Canada-U.S. relations.

The president upped the ante modestly Tuesday, promising to extend procurement rules for federal projects beyond just iron and steel, to also include components like lumber, drywall, glass and even fibre-optic cable, as well as non-ferrous metals like copper and aluminum.

WATCH | Joe Biden delivers his State of the Union speech:

U.S. President Joe Biden delivers his State of the Union speech to the 118th Congress

2 years ago

Duration 6:34

Canada Tonight's Dwight Drummond speaks with republican strategist, Adi Sathi, and democratic strategist, Danielle Moodie, about U.S. President Joe Biden's State of the Union address.

The rules allow for exemptions in cases where domestic sources can't fill the demand alone or would be too costly which means that in practical terms, the math is on Canada's side, said Jean Simard, president and CEO of the Aluminum Association of Canada.

"Facts are facts, data is data the U.S. produces about one-third of what it requires in terms of primary metal; they have to import," Simard said.

"Canada represents about 70 per cent of total U.S. imports. That's not going to change."

Simard and others say the political context is also important: for all intents and purposes, Biden is now on the presidential campaign trail, where he'll need the support of disenfranchised blue-collar voters in the American heartland in order to remain in the White House past 2024.

Still, the rhetoric is jarring, coming as it does just a month after Biden and Prime Minister Justin Trudeau schmoozed at the North American Leaders' Summit in Mexico City and weeks before they'll do so again when Biden visits Canada for the first time as president in March.

"When we do these projects and, again, I get criticized about this, but I make no excuses for it we're going to buy American," Biden said during the state of the union Tuesday.

"It's totally consistent with international trade rules. Buy American has been the law since 1933. But for too long, past administrations Democrat and Republican have fought to get around it. Not anymore."

Canada won a major victory last year when Biden's Inflation Reduction Act, which boasts generous tax credits for electric vehicles as part of a historic $389-billion climate change investment effort, included plans to favour EVs and batteries sourced and built in North America instead of just the U.S.

That change reflected a practical truth of which the Biden administration is well aware, Simard said.

"Whether one likes it or not, to deliver the dream, there will need to be a very pragmatic approach to reality," he said.

"The components, the materials have to come from elsewhere, in addition to whatever is available domestically."

Both in question period Thursday and in an interview with The Canadian Press, International Trade Minister Mary Ng repeated her now-familiar vow to keep up the fight on behalf of workers, manufacturers and suppliers.

"They can count on me and the federal government to stand up for them," said Ng, noting the spirit of continental co-operation that pervaded last month's North American Leaders' Summit.

"North American competitiveness means that you're going to partner with those who, like Canada and the United States, trade together ... and where we create a competitive edge by actually working much more closely."

Canada's Building Trades Unions, the association representing more than 500,000 construction workers and tradespeople, said a critical shortage of skilled labour poses a much more dire threat to the industry in both countries.

"When we look at this issue more closely, obviously we have more alignment than disagreement between the U.S. and Canada around supply chains, tradeand ultimately moving to a net-zero economy," executive director Sean Strickland said in a statement.

"We are confident that Canada and the U.S. will continue to work collaboratively on binational policies that are good for infrastructure, the environment and workers."