U.S. tariffs raise risk Canada will fall prey to foreign steel dumping

OTTAWA — The president of the Canadian Steel Producers Association says Canada may be off the hook for now from American steel and aluminum tariffs but it is still at risk from a glut of foreign steel.

Joseph Galimberti says Canada has to work very quickly to identify possible attempts to circumvent the U.S. tariffs by sneaking steel in through Canada and must be prepared to act to stop this.

“We have been, and will continue to be, in steady communication with the government of Canada to ensure that no steel diversion is taking place as a result of the tariffs imposed by the United States,” said Galimberti.

President Donald Trump required Canada and Mexico to take steps to stop trans-shipments of foreign steel via their ports as one of the conditions for exempting them from the 25 per cent duty on steel and 10 per cent duty on aluminum that will apply to imports from every other country.

Trump signed the proclamation on those tariffs last week and the exemption given Canada was a last-minute victory for the Canadian government. The weekend before the announcement, Ottawa was getting word that Trump was heavily leaning toward including Canada, largely because of concerns steel from China was coming into the U.S. from Canada.

Prime Minister Justin Trudeau dispelled that notion in a phone call to the president on March 5, followed by numerous calls to business and congressional leaders including the heads of the both houses of Congress. Two days later, word trickled out that Canada and Mexico would both be given exemptions, pending the outcome of NAFTA talks.

On Monday, Trudeau started a four-day tour of Canada’s steel and aluminum towns with a stop at a Rio Tinto aluminum production facility in Quebec’s Saguenay region. He is working to reassure anxious workers the government has and will continue to have their backs. At a news conference, he said Canada already has measures in place to prevent foreign countries, mostly China, from dumping steel into Canada, but he can and will do whatever else it takes to protect the industry.

“This is something that we take very seriously, because it does come and directly impact on the great Canadian workers, the great Canadian industries that we count on,” he said. “I’m happy to work with (the United States) to do even more to ensure that diversion or other ways of getting lower-cost material unfairly onto Canadian soil is prevented in every way we can.”

He didn’t say exactly what more Canada is willing to do.

International trade lawyer Larry Herman says Canada can do several things, including promising temporary surcharges under the Customs Tariffs Act on any country found to be dumping steel, as well as tightening up the system that issues permits for steel imports, which he says is more a formality than a check on the system at the moment.

“There’s a lot of steel out there looking for a home,” said Herman. “I think the government should make a statement very soon about what it is doing, what it intends to do and what it can do if the circumstances warrant.”

Additional resources to help the Canada Border Services Agency investigate and search for contraband steel shipments could also help, said Herman.

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