Removal of U.S Steel Tariffs & Safeguards

Upon the implementation of U.S. steel tariffs, as well as the proceeding retaliatory actions, the CISC was proactive in ensuring CISC Members & Associates, as well as affected industry stakeholders were aware of all critical information and had access to on-demand support. Consequently, we were able to better position Canadian steel companies for the best possible outcome during this time.

This effort negotiated by the Government of Canada will once again allow the Canadian steel industry, as well as those employed by it, to succeed and freely grow. With the removal of the 25 per cent U.S. steel tariffs, as well as the Canadian retaliatory measures, Canadian steel companies will experience a decrease in contractual risk or uncertainty and can remain competitive in the global market.

The CISC engaged in the following activities to protect the interests of the steel construction industry:

Facilitated informative meetings led by U.S. construction lawyers to provide support to steel businesses being directly affected by the U.S. steel tariffs and Canadian countermeasures.

Provided thorough recommendations to the Canadian government to ensure that the downstream steel industries weren’t negatively impacted as a result of the dollar-for-dollar Canadian steel tariffs and safeguards.

Lobbied for industry protection and met with government officials to enforce tariff remissions for companies who were forced in unavoidable lose-lose situations due to the Canadian retaliatory tariffs. The companies that were brought forward to the Canadian government were all granted a remission.

Promoted the availability of financial assistance opportunities provided by the Government of Canada. As a result, two CISC Members, among other steel companies, received grants upward of $500,000 each.

Our ongoing efforts to defend the needs of Canadian businesses and Canadian steel workers has led our industry to yet another win. While we are pleased with the outcome of this fight, we will remain diligent in supporting and working closely with the Canadian government to always advocate for fair trade, as well as for the interests of the Canadian middle class.

Recap U.S. Section 232 Tariffs

In February 2018, the U.S. Department of Commerce released a report that provided recommendations to U.S. President Donald Trump that indicated claims of a national security crisis. As a result, President Trump exercised Section 232 of the Trade Expansion Act of 1962, declaring a 25 per cent tariff on all raw steel imports going into the U.S effective as of March 2018. This action promptly impacted a number of countries globally, with the exception of Canada and Mexico due to the pending NAFTA negotiations at the time.

On the morning of May 31, 2018, with no indication of NAFTA negotiations concluding, the U.S. administration declared the immediate expiration of Canada and Mexico’s exemption, including them in the U.S. imposed steel tariffs along with the rest of the world.

The Canadian government promptly retaliated with countermeasure actions in an effort to defend its trade interest and workers.

Canadian Countermeasure Actions

In July 2018, Canada imposed dollar-for-dollar retaliatory tariffs against the U.S., amounting to $16 billion worth of products. This action was taken in direct response to the 25 per cent steel tariff the U.S. administration had implemented earlier that year. The CISC provided thorough recommendations to the Canadian government during this process to ensure that the downstream steel industries weren’t negatively impacted as a result of these countermeasures.

The steel products included in Canada’s countermeasures included:

Low alloy flat rolled plate and col, bars and rods (all standard grades affected)
Low alloy channels, angles, I, T and beams less than 80mm (all standard grades affected)
All alloy flat rolled plate and coils, bars, rods, shapes and sections—with the biggest impact on weather steels
HSS and pipe sections (all sizes)
Cast iron and steel (connections)

The federal government demonstrated their support of the Canadian steel industry by providing a plan of action for those affected by the Canadian tariffs. Financial assistance was available to businesses who required aid as a result of the new tariffs, access to the federal work-sharing program was extended, and a remission process was implemented as a mechanism that relieved or rebated tariffs that put Canadian steel companies in lose-lose situations.

Provisional World Safeguard Measures

With U.S. Section 232 tariffs affecting countries globally, the federal government implemented emergency safeguard measures with the intention to protect the Canadian steel market from a surge of foreign steel imports that would otherwise be destined for the U.S. There had already been evidence of an increase of steel products coming into Canada in large volumes that have had a harmful impact on Canadian producers, Canadian market pricing and the Canadian supply chain.

On October 25, 2018, the federal government implemented a provisional safeguard of 25 per cent surtaxes (tariff) and quotas on steel products from all countries (excluding the U.S. and Mexico) to be in effect until May 13, 2019. Seven steel products are considered at risk and have been included in this provisional safeguard:

Steel plate
Concrete reinforcing bar
Energy tubular products
Hot-rolled sheets
Pre-painted steel
Stainless steel wire
Wire rod

The Canadian International Trade Tribunal (CITT) held a hearing in Ottawa for most of January 2019. The hearing consisted of seven mini-hearings broken up product by product, allowing the CITT to provide a recommendation to the Minister of Finance to decide if the test for imposing safeguard measures have been met.

To conclude the investigation, the CITT recommended safeguards on only two of the seven steel products initially considered at risk. In May 2019, Finance Minister, Bill Morneau announced that the two products that would receive a safeguard surtax were heavy plate and stainless steel wire.