A battered hat perched on his head as he sipped his morning coffee in a loggers' cafe, Larry LeCleir grimaced at the thought of a tariff barrier that could stop him from selling lumber in the United States.
"If the United States puts the tariff on, we're finished. I guess I'll have to go home and look at the cows," said the 34-year-old logger.
The possibility of Washington imposing tariffs on Canadian lumber dominates conversations in towns and logging camps of forest-covered British Columbia, where wood is the predominant industry and the United States is the major market. One-third of British Columbia's lumber is shipped to the United States.
The U.S. Commerce Department is due to issue a preliminary ruling March 7 on whether Canadian lumber is subsidized, and therefore should have a tariff placed on it.
The $2 billion U.S.-Canadian lumber dispute, the largest countervailing duty case ever filed in the United States, illustrates the depth of problems facing the neighbors whose $85 billion annual trade is the greatest between any two countries.
"We are so heavily dependent on the American market that the mills will shut down if there is a tariff," said International Woodworkers of America official Roger Staynor as he drove through the Vancouver Island logging town of Lake Cowichan, where 77 percent of the workers are unemployed largely because of the recession brought on by the low level of U.S. housing starts.
Four hundred miles inland, a bank official in this lumber town of 4,000, which is surrounded by moose-filled forests, said "his saddest job" these days is foreclosing on equipment owned by out-of-work loggers.
But the fears of the Canadian lumbermen find an echoing refrain in mills and logging camps of the U.S. Pacific Northwest, and in the pine forests of Georgia and Alabama. A recession-batttered American lumber industry feels itself under assault from what it believes are government-subsidized Canadian imports.
"Otherwise, how could they sell lumber in Georgia cheaper than mills a few miles away?" asked V.M. (Whitey) Howard, vice president and general manager of Seneca Sawmill Co. in Eugene, Ore., the heart of the Pacific Northwest's logging industry.
"They land wood in Southern California at prices under what we can manufacture it," added John J. Stephens, president of Roseburg Lumber Co. in Roseburg, Ore., about 70 miles south of Eugene.
American lumbermen argue in their petition for tariff relief that the Canadian national and provincial governments, which own 95 percent of the country's vast store of uncut timber, subsidize the sale of logs at a price--called "stumpage"--one-sixth of what loggers pay in the United States.
It costs U.S. mills an average of $138.20 for 1,000 board feet of lumber, while the price across the border for the Canadians averages $24.42, the Americans charge in their complaint to the U.S. International Trade Commission and the Commerce Department's International Trade Administration.
The Canadians insist any difference in stumpage charges is due to the wild bidding, during the boom of the late '70s, for future cutting rights on U.S. Forest Service land. Prices reached as much as $600 for 1,000 board feet, considered so high in today's market that U.S. lumbermen are asking the government to void the contracts.
U.S.-Canadian trade disputes--aggravated by recession on both sides of the border--run from Maine potatoes and California wine to Canadian subway cars, and include such non-traditional areas as radio and television broadcasting, investment opportunities and trucking.
Through it all, the Canadians are fighting a self-perception that they are relegated to being mere "hewers of wood and haulers of water" who face economic imperialism from the more heavily populated and industrialized United States.
"We feel exposed and defenseless, subject to forces outside our control," Canadian Ambassador Allan E. Gotlieb told the Women's National Democratic Club in Washington.
In lumber, however, the United States and Canada developed what appeared to be a common North American market. During the housing boom of the late 1970s, American homebuilders couldn't have existed without Canadian lumber as loggers in both countries shared the feast of high prices and heavy sales. Moreover, the largest American lumber companies, such as the Weyerhaeuser Co. and the Boise Cascade Corp., are deeply involved in Canadian production, mostly for sale to the U.S. markets. And the industry on both sides of the border shares the current hard times.
"They are not having a picnic. Don't get me wrong," said Howard, the Eugene, Ore., company official.
"I sure am hell am not anti-Canadian," he continued, "but until there is enough demand to sop up all the available wood the Canadians will set the price."
But Stephens of Roseburg Lumber sees a smaller market in the future than there was in the late 1970s, when the United States was building about 2 million houses a year. Despite a last quarter spurt, housing starts last year totaled just 1.06 million and predictions for 1983 go no higher than 1.5 million. Furthermore, Americans are building smaller houses, which use less wood.
"The market is permanently smaller. That's why the Canadians are a problem," said Stephens.
Moreover, the Canadians appear to be holding on to an increasing share of the smaller American market. In 1981, for instance, Canadian imports represented 30.5 percent of U.S. lumber sales, up from 25.8 percent in 1977 and 18.1 percent in 1970.
But the American industry's trade complaint has failed to win universal support within the industry. About 350 companies of 2,000--representing a little more than 20 percent of U.S. production--joined in the complaint.
Moreover, the largest labor union in the industry, the International Woodworkers of America, has members on both sides of the border and has sided with the Canadians. However, a smaller union, the Lumber Productiion and Industrial Workers, takes the U.S. lumbermen's side, presumably because all its members work south of the border.
Meanwhile, the National Association of Home Builders has lined up with the Canadians, arguing that tariffs will raise the price of American houses. Seattle homebuilder Harry Pryde, president of the NAHB, said every 10 percent increase in the price of lumber adds $1,000 to the cost of a $100,000 home.
Fueled by the lower interest rates and the spurt in housing starts, lumber prices have increased by about 30 percent during the last 90 days.
Canadian lumbermen follow every move of the U.S. housing market, knowing their livelihood depends on it. There is, furthermore, a sense of incredulity at the protectionist push from the American loggers, especially since Canadians feel they buy so many U.S. goods.
Walking through the British Columbia Forest Products sawmill at Youbou, on Vancouver Island, Assistant Manager Claire Stoney noted that the computers controlling the sawing operation were made in the United States. Much of the heavy equipment at Weldwood of Canada's mill in this logging town also came from the United States as do the heavy trucks and skidders used to cut and move logs in the woods.
Furthermore, many Canadians vividly remember 1980, when Canadian officials helped 10 American diplomats get out of Iran following the takeover of the U.S. Embassy in Tehran.
"We're the Americans' best customers," said union leader Staynor. "I don't think there's a feeling of animosity toward the American industry. It's more of not understanding what's going on."