Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Steel Surtaxes, Retaliatory Import Tariffs Being Removed by End of Week

Posted May 20, 2019

The Trudeau government released a joint statement this afternoon confirming earlier reports that Canada and the United States have agreed to eliminate within the next two days all of the tariffs and retaliatory countermeasures that were imposed last year in an increasingly bitter dispute over cross-border trade in steel and aluminum products.

The agreement applies to Section 232 “U.S. national security” tariffs – 25% on steel imports and 10% on aluminum – as well as Canada’s retaliatory tariffs on steel, aluminum and a diverse range of agricultural goods and consumer products that were targeted by the government as a way of applying political pressure on key American lawmakers. These goods are identified in Customs Notice 18-08 Surtaxes Imposed on Certain Products Originating in the United States, issued by the Canada Border Services Agency on June 29, 2018 and revised on July 11, 2018).

The two sides have also agreed to drop their outstanding litigation before the World Trade Organization regarding Washington’s contentious Section 232 action. Many will be looking now to see if Ottawa choses to intervene in a host of pending WTO cases brought by other countries over the last year similarly challenging the legitimacy of U.S. trade law provisions as applied in this instance to levy punitive measures that Canada argued were illegal and comically “absurd” in terms of any grounds related to security.

Under the deal, the two sides vow to prevent:

  • The importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices; and
  • The transshipment of aluminum and steel made outside of Canada or the United States to the other country.

Governments of the two countries say they intend to consult together on these measures and establish a mutually agreeable process for monitoring the bilateral trade in steel and aluminum. In the meantime, both will continue having the ability to act protectively in response to any “meaningful” surges in the market, with an allowance for separate treatment of goods with a “melted and poured” origin standard so as not to discourage domestic production.

Further detailed information concerning implementation of this agreement, including any new preventative measures or regulatory changes being proposed in connection with the above can be expected to be published shortly.

Much sooner, thankfully, than such guidance is likely to appear, owing to operational changes now hurridly being made to government and industry computer systems, importers should expect to see all additional duties and costly surtaxes which may have been applicable to them removed entirely as of the effective date, most likely on their very next shipment!  Some good news for a change heading into the weekend...

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Should you have any questions or concerns about how this significant policy change might impact your company or if you are looking to find out more about any other issues of concern, don’t hesitate to contact us – our trade experts are here to help.

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