Canadian tariffs on U.S. steel and aluminum

Issue

On July 1, 2018, Canada imposed tariffs on a range of American goods imported into Canada, including a 25 per cent tariff on American-made steel and a 10 per cent tariff on aluminum. The tariffs are in response to U.S. duties of 25 per cent on steel and 10 per cent on aluminum made in Canada.

Tariffs on goods imported to Canada from the United States increase the cost of construction.

There is also concern from Canadian steel manufacturers that the Canadian steel market will be flooded with cheap steel from countries other than the U.S. as a result of the tariffs. This has prompted the Canadian government to consider using safeguards such as quotas and tariffs to protect the Canadian steel market.

On Oct. 1, 2018, Canada, the United States and Mexico reached a tentative trade agreement  to replace the North American Free Trade Agreement (NAFTA). The new agreement will be known as the United States-Mexico-Canada Agreement USMCA. Tariffs on steel and aluminum were not part of the NAFTA negotiations, and therefore, remain in effect.

Since Oct. 25, 2018, Canada has imposed a tariff of 25 per cent on steel imported from countries other than the U.S. in an effort to prevent dumping of foreign steel into Canada.

Current Status

VRCA is supporting the Canadian Construction Association’s (CCA) efforts to lobby the Government of Canada to implement measures that limit the impact of steel and aluminum tariffs on Canada’s construction industry.

Status Updates

  • Via the B.C. Construction Association, VRCA has been asked by the Trade Policy and Negotiations Branch of B.C.’s Ministry of Jobs, Trade and Technology to help collect feedback from industry on the provisional safeguard measures (tariffs) on certain steel products imported from non-U.S. countries. The information collected will be used to inform the B.C. government’s submission to the Canadian International Trade Tribunal (CITT’s) Inquiry. The Trade Policy and Negotiations Branch requested input by end of day on Nov. 28, 2018. The survey can be found at: https://www.surveymonkey.com/r/BCCASteelTarrifs.
  • VRCA, the Independent Contractors and Businesses Association and Urban Development Institute wrote to Prime Minister Justin Trudeau and Canadian Finance Minister Bill Morneau expressing their ongoing concern about the potential impact of safeguard measures on the supply of rebar and other steel products for the British Columbia construction market. Read more.
  • VRCA issued a statement echoing the disappointment expressed by the Canadian Construction Association over the federal government’s decision to impose provisional safeguards on foreign steel imported to Canada from non-U.S. countries, calling the provisional safeguards a double whammy for VRCA members. Read more.
  • The Canadian Construction Association issued a letter to members on Oct. 10 with its analysis of the impact the tentative United States-Mexico-Canada Agreement will have on the Canadian construction industry. Read more.
  • The United States, Mexico and Canada have reached a trade agreement that will replace NAFTA. Despite the new trade deal, on October 1, U.S. President Donald Trump said that the U.S. tariffs imposed on Canadian steel will remain until the U.S. steel industry is protected. Steel and aluminum tariffs were not part of the NAFTA negotiations. Read more.
  • CCA writes to the Honourable Bill Morneau, Canada’s Finance Minister, expressing concern that proposed steel quotas and tariffs will increase construction costs. Read more.
  • CCA provides advice for members on how to mitigate risk caused by tariffs. Read more.
  • CCA recommends the Government of Canada allow for pricing flexibility in government procurements due to unexpected increases in project cost, such as those from retaliatory tariffs. The recommendation was included in the CCA’s written submission for the federal government’s pre-budget consultations in advance of Budget 2019. Read more.
  • VRCA asks CCA to review CCDC documents to see if they provide relief from Canadian tariffs on American-made steel and aluminum. Read more.

The issue of steel and aluminum tariffs was placed on the agenda for the three Division meetings at VRCA. President Fiona Famulak outlined the issue and impact of the Canadian tariffs on imported U.S. steel and aluminum, and issued a seven-question questionnaire developed to capture real examples of how tariffs are impacting VRCA members. VRCA’s feedback was shared with CCA, and the questionnaire circulated across the national network to help CCA collect further impact statements to share in their discussions with government.

VRCA and CCA calls the United States’ imposition of tariffs on Canadian-made steel and aluminum unacceptable. Read more.