Ships loaded with cheap offshore steel are believed to be headed for Canada, but the government will work to make sure it does not become a back door for producers trying to enter the U.S. market, Prime Minister Justin Trudeau said Tuesday on his tour of Canadian steel and aluminum producing regions.
“That’s a concern that we share with the Americans,” Mr. Trudeau said in Hamilton, the second stop on a journey that began Monday in Quebec and will take him to Sault Ste. Marie, Ont., and Regina this week.
The trip comes after Canada won an exemption from tariffs
on the two metals that the administration of U.S. President Donald Trump will levy on all countries except Canada and Mexico.
Mr. Trudeau would not specify what actions the federal government will take to shut out offshore steel.
“We have a whole suite of tariff and countervailing duties that are at our disposal to move forward and ensure that we are not accepting in unfairly produced or sold steel into Canada,” he said.
He spoke to teporters and a group of ArcelorMittal Dofasco employees after touring one of the steel maker’s steel galvanizing mills in Hamilton.
He noted that the integration of the Canadian and U.S. economies is particularly evident in the steel sector where $12-billion worth of the metal crosses the Canada-U.S. border annually.
“Our aluminum is in their fighter jets our steel … goes into their armoured vehicles,” he said.
ArcelorMittal Dofasco president Sean Donnelly said the industry is also worried about Canada becoming a back door.
“The boats are already on the way,” Mr. Donnelly said.
“We need tools to deal with this surge,” he said, but added that the federal government can’t wait for the traditional method of the industry taking cases to the Canadian International Trade Tribunal.
That process can take two years or longer and actions need to be taken more quickly than that, he said.
Mr. Trudeau met with steel industry executives, labour representatives and city officials in Hamilton as part of his tour.
The Trump administration plans to slap tariffs of 25 per cent on steel shipped into the United States and 10 per cent on aluminum imports, but has exempted Canada and Mexico – at least temporarily.
Mr. Trump has stated that the tariffs could be extended to two NAFTA partners if Canada and Mexico do not bend to U.S. demands in the renegotiation of that trade agreement.
Mr. Trudeau and members of his cabinet have insisted that the two issues are not linked and that extending the tariffs to steel and aluminum imported from Canada would harm the U.S. economy.
A heavy lobbying blitz by Canada after the tariffs were first announced March 1 helped convince the U.S. administration to exempt Canadian steel when the final announcement was made last week.
But the U.S. government also wants to make sure cheap steel being dumped into North America by Brazil, South Korea, China and other countries doesn’t enter the United States through a Canadian back door.
Steel makers in Canada are pressing the federal government to make sure Canada doesn’t become a dumping ground for offshore steel originally destined for the U.S. market.
Veteran trade lawyer Larry Herman said Ottawa needs to act without going through a lengthy process at the World Trade Organization.
“Ahead of actually applying border measures on offshore steel, there is a need for the Trudeau government to state its clear policy in dealing with steel diversion,” Mr. Herman wrote in a memo to clients Monday. “That policy should inform the world that Canada will be taking responsive measures, the details – and covered products – to be announced shortly.”
Gary Howe, president of local 1005 of the United Steelworkers union, said his members who work at Stelco Holdings Inc. are taking the tariff issue in stride, having lived through the cutbacks and job cuts generated by two trips through protection under the Companies’ Creditors Arrangement Act since 2004.
Employment at the Stelco mill in Hamilton is about 550 people, said Mr. Howe, who attended the meeting Mr. Trudeau held with steel industry stakeholders in Hamilton.