Tariffs Announced

Nearly a year ago on May 31st, 2018, the U.S. announced tariffs of 25% on imports of Canadian steel and 10% on imports of Canadian aluminum. These Tariffs were to take effect on June 1st, 2018.

Tariffs Impact The Economy

Canada’s steel and aluminum industries are key contributors to the Canadian economy. In 2017, the steel industry contributed $4.2 billion to Canada’s gross domestic product (GDP) and the aluminum industry contributed $4.7 billion. The Canadian and U.S. steel and aluminum industries are deeply integrated and contribute to global competitiveness of the North American economy. Canada buys approximately 50% of all U.S. steel exported, more than any other country. 84% of Canada’s aluminum is exported to the U.S. for further processing.

In response to these tariffs, Canada announced that effective July 1st, 2018, surtaxes or similar trade restrictive counter-measures on imports of steel, aluminum and more than 70 other U.S. products including licorice, coffee, dairy products, pork and bourbon would be imposed. The Canadian tariffs were carefully selected to match the dollar value of the tariffs Canadian companies were paying to the U.S., as well as to target popular products.

Steel And Aluminum Surtax Repealed Effective May 19th, 2019

On May 17th, 2019, the U.S. announced the lifting of steel and aluminum tariffs on Canada and Mexico. A joint statement from the U.S. and Canadian governments said the tariffs for both sides would be removed within 2 days or in effect May 19th, 2019. The U.S. and Canada said they would monitor the imports to prevent steel dumping, which could affect prices.

Effective May 19th, 2019, the United States Surtax Order (Steel and Aluminum): SOR/2018-152 and the United States Surtax Order (Other Goods): SOR/2018-153 imposing surtax on certain products originating in the United States are repealed. Please note that importers will no longer be required to pay surtax pursuant to the above-referenced orders. Anything released from Customs on or after May 19th will no longer be subject to the U.S. Surtaxes.

The removal of steel and aluminum tariffs make a clearer path for ratification of the replacement of NAFTA (USMCA) in the U.S. Congress although the ratification is still uncertain as the U.S. Democrats have voiced concern over labor and environmental provisions in the deal.

Both Canada and Mexico stated they would not ratify the new deal while the tariffs were in place.

Canada announced that as of April 30th, 2019, Canada collected $1.27 billion from the retaliatory measures. Canada also announced a $2 billion aid package to the steel and aluminum industry to help weather the impact of the trade war and also exempted Canadian companies from paying the import duties on steel and aluminum if they could not source the product within Canada or had contracts requiring them to import from the U.S.

Click here to read CBSA Customs Full Notice.

If you have further questions regarding the impact of international trade on your business, please contact one of the expert Trade Advisors at Pacific Customs Brokers. Find out how you can make the most of your trade opportunities.

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About Author
Jan Brock

Jan Brock joined Pacific Customs Brokers in 2015 as a Senior Trade Advisor. She retired from Canada Border Services Agency (CBSA) in 2015 after serving more than 37 years. Jan started her career with CBSA as a summer student in 1976 and worked part-time until she graduated from U.B.C. with a Bachelor of Education Degree in 1980 . Shortly after graduating from U.B.C. Jan worked full time as an inspector with CBSA and within three years was promoted to Superintendent. She served some time in the Regional Operations office as an Operations Review Officer before she was promoted to Chief of Operations first at the Customs Mail Centre, then in the Metro District as the Commercial Chief and ending her career as a Chief at Pacific Highway Commercial Operations where she served as Chief from 1992 to 2015. During her career she was a member of the Customs Drug Team and a trainer in the National Enforcement Program. Jan also served as the Regional Coordinator Officer Powers and Use of Force for the Pacific Region. Jan served on many Commercial Program Reviews and committees both national and regional during her career and possesses an expansive knowledge of importing and exporting into and from Canada.

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While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.