AsianFin -- Canada on Wednesday launches new measures to protect domestic steel industry, including levies targeting steel originating from China.
Credit：Xinhua News Agency
Steel imports from non-U.S. countries "containing steel melted and poured in China" will be subjected to an additional 25% tariff, effective by the end of July, according to Canadian Prime Minister Mark Carney. He added products under the U.S.-Mexico-Canada Agreement (USMCA) will be exempted from the new tariffs.
Carney said foreign competitors "unfairly benefit" from non-market policies. This can include companies exporting products at a lower price than they charge domestically, a practice known as steel dumping. The prime minister said Canada will restrict tariff-free import of cheap, foreign steel to help domestic manufacturers reeling from levies imposed by the U.S.
Carney on Wednesday also announced a tariff rate quota for countries with which it doesn’t have free trade agreements, excluding the United States. The Canadian government would tighten its tariff rate quote--from 100% to 50% of 2024 steel import volumes from the aforementioned non-U.S. countries, and a 50% tariff would apply to steel imports from these countries that surpass the quota limit.
Carney said the quota adjustment will ensure Canadian steel producers have a bigger share of the domestic market. He noted imports now make up nearly two thirds of Canada’s steel consumption, while over 90% Canadian steel exports were destined for the U.S., reflecting an “unsustainable” dependency.
The tariff quota will not affect products that are exempt under the USMCA as Carney said Canada will honor existing arrangements with the agreement. He also announced no changes to countertariffs on U.S. during the prolonged trade negotiations till the August 1 deadline.
Trump on July 10 annonced in a letter to Carney that the U.S. will charge Canada a tariff of 35% of all Canadian imports starting August 1, separating from all sectoral tariffs. Carney late July 10 said Canada will continue the trade talks with the U.S. towards “the revised deadline of August 1.”
Trump’s threatened 35% tariffs on Canada would most likely only apply to those traded outside the USMCA, the Globe and Mail cited a U.S. government official on July 11. And the new tariffs are also not expected to cover oil, gas and potash traded outside the USMCA, which now face 10% tariffs, according to the official.
The Politico the same day learned from a White House official that the Trump administration plans to impose the 35% tariffs only on goods that do not comply with the USMCA, though decision of the ultimate details will be up to Trump. The Canadian government will not double its countertariffs on U.S. steel and aluminum exports on July 21, the previous deadline for the talks, after Ottawa and Washington agreed to extend the deadline to August 1, the Politico reported.
White House trade adviser Peter Navarro on July 11 also floated certain exemptions for good under the USMCA. Navarro in an interview with Bloomberg said the tariffs did not cover goods imported under the agreement, and the 35% rate would be an increase from the current 25% tariff on imports from Canada.
