Canada foreign minister on Trump tariffs: 'We're going to play hard'

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The President's threat comes while the two nations are preparing to renegotiate the North American Free Trade Agreement signed, along with Mexico, more than two decades ago.

On Monday, the US Department of Commerce announced the Trump administration would impose a 20 percent tariff on Canadian softwood lumber, including specific tariffs for five Canadian lumber firms that range from three to 24 percent. The step escalates an economic battle among neighboring countries that normally have one of the friendliest global relationships in the world.

Amid a trade dispute with President Trump, Canada has chosen to respond on Twitter by highlighting its friendly relations with Asia instead.

The US government doesn't have a clear idea of what NAFTA covers, a business body representing several big North American multinationals said on Tuesday after Washington picked a trade fight with Canada.

The trade tensions this week are over a tiny portion of the US-Canada trade relationship.

Trump has called the move "a disgrace" that's hurting US producers in dairy states like Wisconsin.

The White House has not yet released a readout of the phone call that took place hours later between Mr Trump and Mr Trudeau, but the Canadian Prime Minister's office made its position clear.

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Trudeau blasted the tariffs again during a news conference and said the tariffs would harm both countries. President Trump discussed the announcement of new duties on imports of Canadian softwood lumber.

The statement from Ottawa said dairy trade already favors the United States, explaining that the US receives $550 million in USA dairy while Canadian exports $110 million.

The issue at hand: Canada's lowering of prices on some domestically produced dairy and an import tax on ultra-filtered milk from the U.S.

The dispute became news across the state when Grassland Dairy notified almost 60 farms in Wisconsin it would no longer buy their milk starting May 1st because of new trade policies by the Canadian government.

Freeland, who described the tariffs as "punitive, unfair and just plain wrong", said Canada would strongly defend its domestic industry.

Earlier in the day, Trump exuded confidence that the move would not result in a trade war with Canada. "No".

The softwood spat is unfolding amid renegotiation of the NFTA although timber nor dairy are part of the current agreement.