Canada denied a belief within the Trump administration that Chinese steel and aluminum were entering the United States via Canada, according to the CBC.
Yesterday, Canada was granted a temporary exemption from U.S. tariffs of 25 percent on steel and 10 percent on aluminum. Canadian Prime Minister Justin Trudeau spoke with U.S. President Donald Trump on Monday to dissuade the U.S. leader from imposing tariffs and that Canada was not a conduit for the Chinese, according to the CBC citing a government source.
Canada is the No. 1 seller of both products to the United States.
China exports only a small amount of steel directly to the United States, but its massive production has driven down prices globally. Chinese steel exports to the United States have been dampened by prior anti-dumping duties, but the additional tariffs are seen to be further targeted at Beijing to continue to cut steel and aluminum production. Trump has spoken at length about the U.S. trade deficit with China.
China is the second largest exporter of steel into Canada, according to the Global Steel Trade Monitor.
Antidumping duties and countervailing duties are mechanisms used to address effects of unfair trade or problems associated with a surge in imports on domestic industries. As of Dec. 1, 2016, Canada had 14 trade remedies in effect against China and no more than five against any other country.
Canadian Chamber of Commerce president and CEO Perrin Beatty expressed concern in a news release that these new U.S. tariffs will result in diversion of steel and aluminum from affected countries into Canada. The business group said the waiver of the tariffs should be made permanent and not be linked with the outcome of the NAFTA renegotiations.
“We encourage the Government of Canada to ensure that steel and aluminum are not dumped into Canada, and that the Canadian Border Security Agency is appropriately staffed, resourced and financed to deal with this issue,” according to the Chamber’s press release.
Trump’s tariffs will start on 15 days from March 8.