Arcelor secures Canadian funding
Canadian government funding for ArcelorMittal is the first of a series of steps the country will take to support the steel industry amid a tariff fight with the US, Canada’s industry minister says.
Canadian government funding for ArcelorMittal is the first of a series of steps the country will take to support the steel industry amid a tariff fight with the US, Canada’s industry minister says.
Navdeep Bains announced on Friday funding of up to C$49.9m ($38m), a mix of grants and loans, as part of a C$205m modernisation project at the Hamilton, Ontario plant of the Luxembourg-based steelmaker’s Canadian unit, ArcelorMittal Dofasco.
It is the first announcement from a C$250m fund unveiled earlier in 2018 to support steel, aluminium and manufacturing companies affected by the tariff standoff, Bains said, and more are coming. He left the door open to Canada accepting quotas on metal exports, but said US tariffs must be eliminated.
“It’s a priority for us to eliminate the tariffs on aluminium and steel, so we are very engaged with our American counterparts,” Bains, whose formal title is minister of innovation, science and economic development, said in an interview on Friday. “Today’s announcement demonstrates a commitment to the steel industry and steelworkers.”
The US imposed import tariffs of 25% on Canadian steel and 10% on aluminium as of June 1, and Canada responded in kind a month later with its own tariffs.
Despite a September 30 deal to update the North American Free Trade Agreement (Nafta), the metals tariffs remain in place. Canada accepted a quota on tariff-free automotive shipments as part of the trade deal, and a similar step is seen by some as the likely solution to the metals tariffs.
Bains would not rule out a quota when asked repeatedly whether Canada would accept that as an alternative to tariffs even one such as the car sector, which is largely symbolic and well above current production. He said Canada’s focus remains on eliminating the tariffs.
After the Nafta deal, “let’s use the goodwill and momentum going forward to ultimately eliminate the tariff”, Bains said. “We’re making the business case, and the economics of it are very compelling.”
When the Canadian government finalised its retaliatory tariffs in June, it announced C$250m for the steel, aluminium and manufacturing sectors affected by the tariff fight. Friday’s pledge comes from that fund and more announcements will follow and could potentially top C$250m.
“Absolutely we will be making additional announcements in the coming weeks and months. This fund is oversubscribed,” Bains said.