A worker looks at rolls of steel at the ArcelorMittal Dofasco steel plant in Hamilton, Ontario, Canada, March 13, 2018.Mark Blinch
The federal government is moving to block cheap offshore steel and aluminum that could be funnelled to the United States through Canada to avoid tariffs Washington has placed on several countries.
The actions announced on Tuesday will be taken after Prime Minister Justin Trudeau assured U.S. President Donald Trump that Canada will not become a back door for countries seeking to avoid the 25-per-cent tariff on steel and 10-per-cent levy on aluminum announced by the U.S. government earlier this month.
Canada was granted an exemption after intense lobbying, but the exemption is temporary until May 1. Whether it is extended or made permanent depends partly on Canada blocking its own borders to cheap offshore steel and aluminum and on progress in the negotiations to revamp the North American free-trade agreement.
The actions include giving the Canada Border Services Agency the authority to identify and stop shipments that are designed to dodge the duties; granting unions standing to participate in hearings and other proceedings that will examine whether foreign exports are hurting producers in Canada; and giving the CBSA more flexibility to determine whether prices in an exporter’s home market are reliable or distorted.
The government is giving Canada Border Services extra powers to identify businesses trying to dodge import duties and ship cheap steel and aluminum through Canada. The PM says existing rules are being 'strengthened.'
The Canadian Press
“The measures are intended to make sure that there is no trans-shipment or redirection of low-priced steel that might come in from other places around the world into the Canadian market,” Ralph Goodale, Minister of Public Safety and Emergency Preparedness, said on Tuesday. “We want to protect our steel and aluminum industries and these measures are to ensure that there is no circumvention of Canadian border rules or regulations,” Mr. Goodale told reporters in Ottawa.
Steelmakers in this country and some companies that purchase steel have urged the federal government to tighten borders, noting that steel and aluminum destined for the United States can be diverted to Canada and then shipped south or sold in Canada, where it hurts production in domestic mills.
“These regulatory changes are welcome,” Joseph Galimberti, president of the Canadian Steel Producers Association, said in an e-mail response on Tuesday. “That said, much more will be required in the immediate term to protect Canadian investment and employment from the harm of steel diversion.”
Steel shipped into Canada from offshore amounted to about 24 per cent of Canadian consumption of 15.2 million tonnes in 2017.
Aluminum producers in Canada also applauded the moves.
The actions will ensure there is no foreign metal going into the U.S. market through Canada, the Aluminum Association of Canada said in a statement.
The European Commission launched a safeguard investigation – a World Trade Organization-approved temporary restriction to protect a domestic industry – into 26 steel products or categories. Such an action can lead to tariffs or quotas.
Canada has 71 trade remedy measures in place against steel and aluminum imports, the Prime Minister’s Office said in a news release on Tuesday.
In its most recent action, the Canadian International Trade Tribunal found in January that dumping of steel pipe from South Korea caused harm to Canadian producers, including the Evraz North America mill in Regina.
But steelmakers in Canada say the process of bringing trade cases on specific products shipped into Canada from various countries takes too much time to have an immediate impact.
Sean Donnelly, president of Hamilton-based ArcelorMittal Dofasco Inc., told reporters earlier this month during a visit to one of the company’s mills by Prime Minister Justin Trudeau that ships carrying cheap steel are already heading for Canada.