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As the floodwaters recede on the U.S. Gulf Coast, attention is shifting to rebuilding.

Harvey left behind a trail of epic destruction. At least 100,000 homes have been damaged or destroyed by wind and water from the storm. The mounting financial toll is now estimated at an eye-popping $190-billion (U.S.), making it the priciest natural disaster to hit the United States.

Americans will need a lot of lumber for the reconstruction, including lumber from Canada.

Read more: U.S. delays final decision for tougher duties on Canadian softwood

The bad news is that the U.S. trade fight against Canadian softwood lumber will make that rebuilding a lot more expensive.

So far this year the price of spruce 2x4 lumber is up as much 28 per cent in the United States – to nearly $400 per thousand board-feet from $313 at the start of the year – according to Jon Anderson, publisher of trade publication Random Lengths, which tracks prices. He said a big part of the run-up is due to the duties imposed this year on Canadian lumber, which had about a third of the U.S. market before the latest trade dispute erupted.

"I've been here for 40 years and I don't know if I've ever seen a market like this," Mr. Anderson said.

Throw in forest fires, rising housing starts, a spike in demand from Texas and threats of permanent limits on Canadian lumber imports, and all the ingredients are in place for sustained high prices.

This puts the Trump administration in an awkward spot.

It also creates a rare public-relations opportunity for Canada.

The U.S. lumber industry, which launched the trade fight, wants the administration to cap permanently Canadian lumber imports, regardless of what happens to demand, supply or prices. And it's pushing for steep duties to get its way.

It's not hard to figure out what that will do. Quotas will inflate what Americans pay for their lumber, in perpetuity. Protectionism comes at a price and it's typically paid by consumers.

The Trudeau government, and Canada's lumber industry, should be making their case loudly and clearly. Restricting the flow of Canadian lumber to the United States is like slapping a hefty tax on flood victims and sending the cash to U.S. mills and woodlot owners.

Crass perhaps, but it's true. The negotiated settlement that both Ottawa and the Trump administration have been pursuing in the long-running lumber dispute will artificially inflate the price of an essential building material, punishing the very people the administration insists it wants to help in Harvey's aftermath.

Managed trade is the byproduct of the brand of economic nationalism championed by the U.S. President Donald Trump and others. It's a world where job protection for the few and narrow economic interests win out over broad-based economic well-being. Consumers and taxpayers inevitably pay the price of this misguided ideology.

At least one Canadian lumber company was quick to capitalize on Harvey's PR potential. Montreal-based Resolute Forest Products, one of the companies targeted by the U.S. trade case, is sending a railcar full of free lumber and various paper products to help the people of Houston. Speaking on CNN, Resolute spokesman and former Texas resident Seth Kursman ducked a question about whether the company's gesture is an attempt to score political points.

"This is the largest bilateral trade relationship between any two countries in the world. The two countries are always lock-step together," Mr. Kursman said. "The politics is another day; right now we're dealing with human tragedy."

Of course, this is about politics. Harvey offers a perfect opportunity to expose the nefarious consequences of economic nationalism at a time when it might actually get a sympathetic ear from some Americans.

High lumber prices are exactly what the U.S. lumber industry wants. And managed trade with Canada is the way they'll get it.

But it's a raw deal for consumers in both countries. And the profits diverted to U.S. producers and landowners will cost jobs and economic opportunity in Canada.

Canadians shouldn't shy away from telling like it is to the storm-weary residents of Texas and the U.S. Gulf Coast.

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