Ottawa imposes surtax on dumped steel
25 per cent tax intended to help Canada compete, says Canada’s innovation and economic development minister
The federal government is stepping up efforts to protect Canadian steelmakers from “excessive imports” of foreign steel by imposing a 25 per cent surtax on certain products.
The anti-dumping move announced Thursday is the latest action to mitigate damage from the ongoing trade war between the United States and Canada that continues even with a new agreement for a replacement to the North American Free Trade Agreement.
A 25 per cent tariff on steel and 10 per cent tariff on aluminum went into force June 1 in the U.S. because of so-called “national security interests.”
Those measures were followed in Canada by retaliatory tariffs against American steel, aluminum and other products.
The continuing trade fracas has encouraged U.S. bound foreign steel — that also faces the American tariffs — to look northward to Canada for new business, Navdeep Bains, the minister for innovation, science and economic development, told The Spectator.
“The idea is to provide some relief to Canadian businesses that cannot find a substitute Canadian product,” he said. “The overall objective is that we are taking action for steelmakers and for businesses to make sure they are able to compete.”
Bains could not say how much redirected steel is entering the Canadian market, only that the government move is a “reflection of a thorough consultation process with the industry to look at how we can prevent the diversion of foreign steel products coming into Canada.”
In all, seven steel products — heavy plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, prepainted steel, stainless steel wire, and wire
rod — were identified for “provisional safeguard measures.”
Of those seven products, hotrolled steel and prepainted steel are produced by Stelco and ArcelorMittal Dofasco, said Joe Galimberti, president of the Canadian Steel Producers Association.
Galimberti said the steel industry supports the government move. “The safeguard is a tool intended to stabilize the market and frankly the Canadian market needs to be stabilized against increases in imported steel ... Canada is an undefended market.”
He said there have been increased volumes of imported steel entering Canada in recent months “and there is a significant threat of substantial additional volumes,” he said.
McMaster University professor Marvin Ryder said dumping is an issue but he noted it’s not always a simple matter to suddenly redirect shipments to Canada that were originally intended for the U.S.
“No boat is going to randomly land in Canada and ask ‘hey buddy, do you need some steel?’ Orders have to be placed. Buyers have specific requirements.”
However, Ryder said it is good optics to be seen as standing up to diverted steel because American authorities have complained for years that cheap foreign steel is being routed through Canada into the American market and presented as Canadian-made.
“I think it might help in terms of bringing an end to the tariffs all together because this is something the United States has wanted all along,” he said.
The surtax will be applied “in cases where the level of imports from trading partners exceeds historical norms.” It will begin Oct. 25 and last for 200 days, pending an investigation by the Canadian International Trade Tribunal to decide whether the safeguards should continue.
The government also announced Thursday that some Canadian manufacturers will be able to import steel and aluminum products from the U.S. without paying tariffs when there is no Canadian option available.
The exemption will be decided on a case-by-case basis and offered “until such a time that Canadian producers are able to adequately meet domestic demand.”