Issue
On May 17, 2019, the governments of Canada and United Stated have announced an agreement to lift tariffs on steel and aluminum, ending the trade dispute that began nearly one year prior.
However, VRCA is continuing to monitor this file after the Government of Canada passed legislation on June 22, 2019 to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed in June, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
Background
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.
On Dec. 19, 2018, the Government of Canada announced it will provide targeted relief for steel and aluminum businesses and workers. Read the government news release.
On April 26, 2019 the Government of Canada announced it is imposing final safeguard measures on two types of imported steel products while removing the provisional safeguards from five other types of imported steel, including rebar. Read the government news release.
On May 17, 2019 the governments of Canada and United Stated announced an agreement to lift tariffs on steel and aluminum. Read the Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum.
The Government of Canada passed legislation on June 22, 2019 to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
Current Status:
VRCA is continuing to monitor this file after the Government of Canada passed legislation to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed in June 2019, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
While the file was active, VRCA supported 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 and safeguards on Canada’s construction industry.
Status Updates
Resources
News Release: Government of Canada Provides Targeted Relief for Steel and Aluminum Businesses and Workers
Backgrounder: Targeted Relief for Canadian Businesses from Countermeasures on Certain U.S. Imports
Lists of steel, aluminum and other goods imported from the United States subject to remission of countermeasures
As part of the Remission Order there are four schedules with different conditions attached to each schedule.
- For goods in Schedule 1, relief is granted for an indefinite period for steel and aluminum products imported from the U.S. on or after July 1, 2018.
- For goods in Schedule 2, relief is granted for a limited period from July 1, 2018 to April 30, 2019 for steel and aluminum products imported from the U.S.
- For goods in Schedule 3, relief is granted for steel and aluminum products imported from the U.S. This relief is limited to specifically listed importers, for specified periods and subject to applicable conditions as prescribed in Schedule 3.
- For goods in Schedule 4, relief is granted for an indefinite period for other goods imported from the U.S. on or after July 1, 2018, subject to applicable conditions, as provided in the amending Remission Order.
Applying for United States Surtax Remission
In order to receive surtax remission for good listed under any of the four schedules, companies need to apply to Canadian Border Services Agency (CBSA). For details on how to complete this process, please see the resources below:
- Remission Order: United States Surtax Remission Order
- Guide: Memorandum D17-1-10
- Form: B3-3 – Canada Customs Coding Form
Applying for In-Transit Remission on Steel from Non-U.S. Sources
In order to receive surtax remission for goods in-transit prior to October 25, 2018, companies need to apply to their regional CBSA office. For details on how to complete this process, please see the resources below: