Canada is taking steps to prevent the transhipment and diversion of steel and aluminum imports into its market as a result of the US' newly imposed metals tariffs, Canadian Prime Minister Justin Trudeau's office said Tuesday.
The US began implementing a 25% tariff on imports of steel and 10% tariff on imports of aluminum March 23. Canada has been granted a temporary exemption to the tariffs that is set to last until May 1, or until the US and Canada are able to work out a longer-term trade agreement.
The exclusion could leave Canada vulnerable to transhipment or a flood of additional imports from sources that are trying to avoid the new taxes levied by the US.
"Canada is a trading nation, and we will not allow North American industries to be hurt or threatened by unfair trade practices, like the diversion of steel and aluminum," Trudeau said in a statement. "Our businesses and workers rely on our integrated industries, and we will take strong action to defend and protect our most important trade relationships. Canada will not be used as a backdoor into other North American markets."
Trudeau's office announced a number of regulatory changes that will be subject to a 15-day consultation period, including new anticircumvention investigations that will allow the Canada Border Services Agency to identify and stop companies trying to dodge duties, giving CBSA greater flexibility in determining whether prices used in the exporter's domestic market are reliable or distorted, and giving unions representing steel and aluminum workers standing to participate in trade-remedy proceedings, including at the Canadian International Trade Tribunal.
Canada also will increase the frequency of meetings between border agencies in order to improve the sharing of information and enforcement action, Trudeau's office said, noting Canada will undertake an urgent review of its trade enforcement agencies to make sure they have the resources needed to take action on unfair trade.
Canada also will look to meet more often with the US and Mexico to discuss solutions to issues that harm all three countries, including transshipment, diversion, and global overcapacity, Trudeau's office said. Additionally, the government will participate in new federal-provincial-territorial-stakeholder committees, which will meet regularly to monitor steel and aluminum trade "to ensure imports do not hurt Canadian and North American jobs."
The prime minister's office noted Canada already has one of the toughest enforcement regimes in the world to combat unfair trading practices and currently has 71 trade remedy measures in place on steel and aluminum imports.
