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Canada Acts on Steel and Aluminum in Wake of Trump Tariffs

Thursday, March 29, 2018
Sandler, Travis & Rosenberg Trade Report

Following the U.S. imposition of additional import tariffs on steel and aluminum from around the world, Canada announced March 27 several measures aimed at preventing such products from being transshipped (ostensibly to the U.S. via Canada) or diverted (most likely into the Canadian market from the U.S.). These measures could weigh in Canada’s favor as the U.S. considers granting it a permanent exemption from the tariffs.

According to a press release from the Canadian government, the following regulatory changes will be subject to a 15-day consultation period.

- New anti-circumvention investigations will allow the Canada Border Services Agency to identify and stop companies that try to evade duties imposed under any of Canada’s existing 71 trade remedy measures on steel and aluminum (e.g., by slightly modifying products or assembling them in Canada or a third country).

- In calculating duties, the CBSA will have greater flexibility in determining whether prices charged in the exporter’s domestic market, which are used for comparison, are reliable or distorted.

- Unions will gain standing to participate in trade remedy proceedings, including at the Canadian International Trade Tribunal, into whether foreign exports are hurting domestic producers.

In addition, the Canadian government will (a) coordinate more closely with the U.S. and Mexico to strengthen border enforcement, (b) “urgently” undertake a review to ensure enforcement agencies have all necessary resources to combat unfair trade, (c) look to meet more often with the U.S. and Mexico on issues that harm all three countries, including transshipment, diversion, and global overcapacity, and (d) participate in new stakeholder committees that will meet regularly to monitor steel and aluminum trade.

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