February 20th, 2018, Hamilton, ON: The Hamilton Chamber of Commerce is concerned about the implications of the United States Department of Commerce’s recommendations to President Trump, under a NAFTA Section 232 investigation requested by President Trump in April 2017, concerning the Steel and Aluminum Industries. The law allows the president to unilaterally impose Tariff taxes and other restrictions on imports for reasons of national security, breaking from any existing trade protocols under NAFTA or World Trade Organization.

The recommendations were publicly released on Friday, February 16th, setting the stage for President Donald Trump to make a decision on whether to impose quotas or tariffs within the next 90 days.

The options are as follows:

1. A global tariff of at least 24% on all steel imports from all countries, or
2. A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
3. A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

In addition, the report recommends that a process be put in place to allow the Secretary of Commerce to grant requests from U.S. companies to exclude specific products if the U.S. lacks sufficient domestic capacity or for national security considerations. Any exclusions granted could result in changed tariffs or quotas for the remaining products to maintain the overall effect.

The Chamber believes that there will a negative impact on the Hamilton Steel Industry under all of the options above. Experts also potentially expect retaliatory tariffs from the Canadian Government as well as a surge in Steel Dumping from foreign countries into Canada as an alternative to newly introduced Tariffs in the United States.

“Our members within the Steel Industry are considering these proposals one of the most critical competitive threats to their operations in decades. With a highly integrated supply chain between Canada and United States, we simply cannot afford a disruptive trade and tariff war between our countries” said Keanin Loomis, President & CEO of the Hamilton Chamber of Commerce. “We will be collaborating with our members, the Canadian Chamber of Commerce and other Chambers in Ontario with businesses in the steel industry to formulate a response to the Canadian Government this week” added Loomis.

While the report was instigated by growing concerns on the negative impact of artificially cheap imports from non-market economies, particularly China, the report from the Department of Commerce bears no recommendation for an exemption for Canadian Businesses. Several witnesses within the report support a Canadian exemption, with a stipulated desire to see stronger investments alignment between the trade enforcement efforts of the two Countries.  The Chamber has previously raised concerns about the inefficient Trade Remedy System and a lack of proactive enforcement resources available to the Canadian Border Service Agency.

See here for the full report.

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For more information, please contact: Huzaifa Saeed, Policy & Research Analyst, Hamilton Chamber of Commerce | e: h.saeed@hamiltonchamber.ca | t: 905-522-1151 ext: 230

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