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Canada?s forestry industry




20 Canada?s forestry industry (composed mainly of those involved in the lumber industry) directly employs about 370,000 workers and indirectly employs an additional 510000 people in support services. Forestry products account for nearly 3 percent of Canada?s gross domestic product (GDP) and 14.1 percent of exports. Lobbyist for the US lumber and timber recently filed a complaint with the US international Trade Commission (ITC) and the US Department of Commerce (DOC) alleging that the Canadian government provided a subsidy to its lumber producers and caused harm to US lumber and timber producers. As a result of those concerns one US lobbyist proposed the imposition of a 15 percent excise tariff on all Canadian forestry products. Determine the likely impact of the proposed 15 percent excise tariff on equilibrium price and quantity of lumber exchanged in the US World domestic consumers and producers benefit from the proposed tariff? Explain carefully.


Paper#28045 | Written in 18-Jul-2015

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