Canada is threatening a trade war with the United States over softwood lumber as members of the federal government said they're studying which U.S. goods they could slap with tariffs.

Several cabinet members said Tuesday that Ottawa is identifying products where Canadian tariffs would cause maximum pressure on the U.S. economy and minimal damage domestically.

A government official said products already under consideration include water and California wines, but added that Canada will await a World Trade Organization verdict before proceeding.

At a brief media scrum, Prime Minister Paul Martin castigated the United States for its lumber protectionism and its decision to ignore yet another ruling by a NAFTA panel made last week.

"The American position is absolutely untenable. It's unacceptable," said Martin said, who didn't mention tariffs.

Cda-US-Softwood, 2nd Writethru Bgt


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