Trade Compliance

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Trudeau Government Lifts Safeguards on Certain Steel Imports

Posted May 01, 2019

The Trudeau government on April 26 announced that it would be ending tariffs and quotas on several types of imported steel products, despite concerns by steelworkers over potential job losses and other damaging effects they claim the move could have on the industry.

The government had imposed the safeguard measures last October to stabilize the market and mitigate the harm to domestic producers caused by a surge in the dumping of cheap steel products from China and other low-cost exporters resulting, at least in part, from the Trump administration’s protectionist crackdown on imports of foreign metals.

A statement issued by the Department Finance indicated that the government was allowing the temporary safeguard measures to expire on imports of concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel and wire rod ends, but will maintain safeguards on steel plate and stainless wire.

The action follows recommendations made in a comprehensive report by the Canadian International Trade Tribunal after what it called “one of the most complex inquiries ever conducted” that involved 38,000 pages of documentation and almost two weeks of testimony from 119 participants, including Canadian and foreign steel producers, steel importers, trade unions and governments.

Regarding the five products where safeguards are now being removed, the CITT inquiry determined the goods were not being imported into Canada in such increased quantities in recent years as to be “a principal cause of serious injury or threat thereof” – one of the required conditions under international trade rules for imposing such emergency safeguard measures.

Despite this fact, a statement issued by the United Steelworkers of Canada blasted the government for failing to protect the industry and “abandoning” Canadian workers and communities in what the union described as “their hour of need.”

“Cargo ships are now undoubtedly bound for Canada to dump massive amounts of cheap, subsidized foreign steel into our market, threatening workers and producers across the country,” warned USW National Director Ken Neumann.

In addition to predicting the government’s decision would deter future business investment in the industry, the union argues the move also jeopardizes any chance of resolving the ongoing dispute between Ottawa and Washington over Trump’s metals tariffs by demonstrating “that Canada would appear to be either unwilling or unable to protect its steel market,” according to USW International President Leo W. Gerard.

Over the next month, the government says it intends to conduct an “intensive” consultation with the steel industry, workers and other stakeholders to help assess what, if any, further protections are needed. “Our government stands ready to use all legal avenues at its disposal to protect our industry from unfair trade practices and the abuse of our trade remedy system,” said Finance Minister Bill Morneau.

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