U.S. Metal - Canada Drops Hope for Quick Exemption from U.S. Metals Tariffs

Canada is less hopeful about an expectation that the Trump Administration will quickly remove tariffs that it imposed on exports of steel and aluminum products and is opposing a U.S. push to agree to strict quotas, reported Reuters, citing sources familiar with the matter.

The U.S. President Donald Trump imposed the duties on Canada and Mexico early in June for the so-called purpose of national security. Canada and Mexico entered into a renewed continental trade agreement last week, but the measures still stand there.

As Canada sells the most aluminum and steel to the United States, Washington has a worry that other countries would attempt to ship their exports through Canada and pretend the metals had been made by Canadian producers.

The Canadian government, in order to ease those concerns, said October 11 it would impose new tariffs and quotas on imports of seven categories of steel from many nations to block a potential rise in imports.

A 25 percent tariff will come into force on Oct. 25, 2018 “in cases where the level of imports from trading partners exceeds historical norms”, a government statement said.

Mexico, one of the countries to be affected by the new measures, said it “lamented” Ottawa’s decision and would seek to have its exporters’ steel products excluded from the trade protections.

Jerry Dias, head of Unifor, Canada’s largest union in the private sector, said the tariffs would keep out subsidized steel from China and South Korea.

“It’s also sending a message to the United States,” he said in an interview. “Now that the issue is resolved, there’s no meaningful reason for the U.S. to continue to punish the steel industry on both sides of the border.”

The Canadian Prime Minister Justin Trudeau is pessimistic about the quick ending of the U.S. tariffs, the sources said on condition of anonymity.

In March, the United States and South Korea reached a deal whereby Seoul agreed to cut steel exports by 30 percent based on the average level over the past three years in exchange for exemption from U.S. tariffs.

During discussions on the new United States-Mexico-Canada Agreement (USMCA), the U.S. side asked Canada to sign a similar arrangement for both steel and aluminum, one source said.

Read Also: US-Mexico Trade Deal Reached for Overhauling The NAFTA

Canada turned down the request and made clear any cap on the metals would have be at a level higher than current exports to allow room for shipments to grow.

“It was so unacceptable that the discussions just ended before they began,” said one source.

The United States, Mexico and Canada are due to sign the USMCA at the end of November, though the final deal seems to be at stake.

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