MRO Magazine

Canada moves to block steel dumping with 25% surtax on select products

October 12, 2018 | By Christopher Reynolds

The Canadian government says it will impose a 25 per cent surtax
on some foreign steel products in a bid to head off dumping.
The Finance Department said “excessive imports” are harming the
steel industry, prompting it to impose a surtax on seven products
that range from rebar to wire rods.
The surtax, which begins Oct. 25, will be in place for 200 days,
pending an inquiry by the Canadian International Trade Tribunal into
whether longer-lasting safeguards are necessary, the government
The announcement comes more than three months after Canada
imposed tariffs on $16.6 billion worth of American goods in
retaliation for hefty U.S. tariffs on Canadian steel and aluminum.
The government also announced Thursday that some Canadian
manufacturers can now import those products from the U.S. without
paying the surtaxes that have applied since July 1. A portion of the
relief will be temporary, offered until Canadian producers are able
to adequately meet domestic demand.
The exemption applies on a case-by-case basis to companies that
applied for it, and pertains to American steel, aluminum and certain
other products.
The products affected by the fresh tariffs go into structures
from condominiums to dams and bridges, “which encompasses a heck of
a lot of steel,” said Jesse Goldman, a lawyer representing the
Canadian Coalition for Construction Steel.
He said the surtax puts the construction steel industry in “a
very dire position” because of Canada’s limited domestic steel
“Because of the actual quota amounts for this type of steel from
non-U.S. sources, U.S. steel is going to come into Canada at record
high prices. They will simply pass on the 25 per cent retaliatory
tariffs to their Canadian customers.”
The surtax on steel plates and other products could
“jeopardize” mega-projects in Newfoundland, which relies almost
exclusively on foreign steel, primarily from Europe, Goldman said.
A lot of imported structural steel has been put toward the
refurbishment of the Parliament buildings, he added. “It’s more
ironic than intentional, but it gives you an example of the
importance of imported steel in Canada.”
The country’s geography deters West Coast buyers from purchasing
from central Canadian mills. It costs more than four times extra to
ship a tonne of steel to Vancouver from Ontario than it does from
China or Korea, said Richard Lyall, president of the Residential
Construction Council of Ontario.
With rebar an essential component in residential towers, the new
steel tariff could boost the price of new condos in Vancouver by up
to $10,000 per unit, Lyall said.
“Housing affordability got thrown under the bus on this one,”
he said.
Finance Minister Bill Morneau is slated to address the Commons
international trade committee Tuesday on its study of how tariffs
are impacting Canadian businesses and workers.


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