Toronto, August 20, 2018
The Federal Government is asking for input, by August 29, 2018, on emergency safeguards it is considering to stop a surge of cheap foreign steel imports entering Canada. The products in question include:
They are flooding into the Canadian market because the makers want to avoid tariffs imposed by the U.S..
The proposed safeguards would give the Federal Government the power to stop the surge by imposing limits on the amount of steel imported into Canada. The impact would be immediate because the government could enact the restrictions without first getting a ruling by the International Trade Tribunal on the legitimacy of the tariffs, which would happen at some later date.
Some stakeholders, including the construction industry, downstream fabricators and manufacturers, oppose the safeguards, mainly because they believe the new trade restrictions will lead to higher prices.
Canada's approach may be similar to the European Union which set import quotas on 23 types of steel products last month. In the EU, a tariff of 25% will be applied when the volume of imports exceeds the average amount of imports in the preceding three years. The quota is allocated on a first-come-first served basis, rather than discriminating against any individual country.
Canadian Finance Minister Bill Morneau says the Federal Government will do whatever is necessary to protect Canadian steel makers against unfair competition. He added that the dispute is not directly related to the ongoing NAFTA renegotiation. Canada wants to avoid being accused by the U.S. of being a back door for cheap steel, where the true origin of steel is hidden by moving it to another country before it enters the U.S.. For example, steel made in China could be shipped to Canada, where it is disguised or falsified prior to being shipped in to the U.S..
Updates will be issued as the situation develops.
For more information please call Brian Rowe, Director – Customs Compliance & Regulatory Affairs at (905) 882-4880, ext. 213.