Canada has said it will take the dispute to the WTO or NAFTA Trade Tribunal. Trump also went after Canadian dairy farmers on Twitter.
Natural Resources Minister Jim Carr and Foreign Affairs Minister Chrystia Freeland said in a joint statement that Canada "disagrees strongly" with what they called "an unfair and punitive duty".
Canadian firms immediately denounced the decision. In multiple public appearances Tuesday, Commerce Secretary Wilbur Ross emphasized that the reason lumber and dairy have erupted as irritants is they're not properly addressed in the old agreement, which he called obsolete.
The so-called countervailing duties, which counter what the USA considers Canadian subsidies, came in below some analyst expectations.
"Standing up for Canada's interests is what my job is, whether it's softwood or software", Trudeau said, prompting applause and cheers.
Their advances suggests that "perhaps the tariff isn't as high as some people might've been fearing", said Colin Cieszynski, chief markets strategist at CMC Markets.
That's what he wrote the morning after his government announced initial duties up to 24 per cent on Canadian lumber, with more expected later this year.
Canfor, it says, is subsidized at a rate of 20 per cent, while West Fraser, says the U.S. Department of Commerce, is subsidized at a rate of 24 per cent, says a release from the U.S. Lumber Coalition.
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"Today's ruling confirms that Canadian lumber mills are subsidized by their government and benefit from lumber pricing policies", Cameron Krauss, legal chair for the U.S. Lumber Coalition, said in a statement.
After the U.S. made the final approvals on duties, Canada would likely challenge them at NAFTA and WTO panels in 2018.
However, U.S. importers have long accused Canada of unfairly subsidising the commodity. That agreement put to bed a dispute starting in 2001 over lumber between both countries. The White House's daily briefing began with exchanges about the most arcane Canadian trade issues, like stumpage fees from public land and dairy regulations that have limited imports of milk proteins.
The Canadian government protects its dairy industry through import tariffs and other measures, and dairy farmers in Canada have recently slashed some of their prices to undercut USA dairy farmers.
"We don't want to be taken advantage of by other countries, and that's stopping and that's stopping fast", he added. Most of the softwood in Canada is owned by provincial governments, which set prices to cut trees on their land, while in the United States it's generally harvested from private property.
The duties were imposed to create a level playing field for American lumber companies.
She said it's important that the government be "strong, calm and reasoned in the face of this American provocation", adding that subsidizies to help forestry here could jeopardize Canada's court case. Oregon Democratic senator Ron Wyden told Lighthizer the fight is the "longest running battle since the Trojan War".
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