Canadian steel and aluminum producers call for urgent tariffs to combat Chinese dumping

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Canadian steel and aluminum producers are urging the federal government to keep pace with Mexican and Americans counterparts to implement tariffs on Chinese aluminum and steel to ward off dumping.

“We can’t emphasize enough how critical a moment in time this is to stand in lockstep with our biggest trading partner the United States and frankly Mexico as our CUSMA partner,” said Catherine Cobden, president and chief executive of the Canadian Steel Producers Association, during a press conference Thursday in Ottawa. “We can’t be the only CUSMA country that is not taking this serious action.”

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The Canadian Steel Producers Association represents 13 steel companies including Stelco, Algoma Steel Inc. and Rio Tinto Fer et Titane. Cobden was joined by Jean Simard, president and chief executive of the Aluminium Association of Canada, which represents Canada’s three main aluminum producers Alcoa, Aluminerie Alouette and Rio Tinto.

The call to action from the industry groups follows the U.S. government’s announcement in May that it will implement a 25 per cent increase on tariffs for Chinese steel and aluminum. The U.S. has also hiked tariffs on Chinese electric vehicles (EV), semiconductors, critical minerals and batteries.

In July, in response to concerns that Chinese steel and aluminum producers could circumvent these new trade measures through Mexico, Mexican President Andrés Manuel López Obrador released a joint announcement with U.S. President Joe Biden that would add an additional 10 per cent tariff on aluminum and a 25 per cent tariff on steel that is not melted in Mexico.

There is now increasing concern that Canada could become a trade back door for Chinese steel and aluminum.

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Last month, Finance Minister and Deputy Prime Minister Chrystia Freeland announced consultations with Canada’s EV and its related supply chain industries in response to these new trade measures.

The 30-day consultation period ended on Aug. 1, with no formal announcement on whether Canada will apply measures in accordance with section 53 of the Customs Tariff Act, a policy option outside of the normal trade remedy system Canadian industries usually use to implement tariffs.

While Canada is one of the largest users of the trade remedy system, Cobden said on Thursday it is simply not enough to combat the overcapacity of steel and aluminum coming from China.

“Despite 34 direct tariffs on China steel, we still see a doubling of Chinese steel in our market over the last several years,” said Cobden.

Cobden argues that failure to act on this in a timely way could mean the loss of jobs. The steel industry in Canada currently employs 23,000 Canadians directly and supports 100,000 jobs indirectly. The aluminum industry employs 9,000 people while supporting 20,000 jobs indirectly.

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The industry groups also highlighted the risk Canada’s inaction could pose to our North American trade relationships in the future.

“It would lead to inevitable challenges with our largest trading partner,” said Cobden. “We think it’s imperative that the government meet the moment, keep our CUSMA partnership whole, as well as protect our domestic steel and aluminum industries.”

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