Canada tribunal recommends tariffs for two types of steel, exclusion for others

TORONTO (Reuters) - The Canadian International Trade Tribunal (CITT) said on Wednesday that tariffs should stay on two types of steel originating from many countries other than the United States, and those on five other steel products should be lifted.

FILE PHOTO: Pipes are seen at Bri-Steel Manufacturing, a manufacturer and distributer of large diameter seamless steel pipes, in Edmonton, Alberta, Canada June 21, 2018. REUTERS/Candace Elliott

The Canadian government had argued the special tariffs, called safeguards, were needed to protect local steel mills from a surge in imports from producers shut out of the U.S. market by President Donald Trump’s metal tariffs.

Producers want the safeguards to remain in place for all the products, but the CITT recommended they be kept only for stainless steel wire and heavy plate because of a threat of “serious injury” to the domestic industry.

Safeguards are emergency measures allowed under international trade law to respond to a sudden rise in imports. In this case, the government took the unusual step of imposing a system of quotas and tariffs before the CITT completed an investigation into whether they were necessary.

As a result, Canada has charged a 25 percent safeguard tariff since Oct. 25, 2018, on seven types of steel from most overseas producers, where import levels are above average.

The products covered included heavy plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, and pre-painted steel, among others.

On Wednesday, the tribunal recommended tariffs be imposed on heavy plate and stainless steel wire coming from most countries except for Korea, Panama, Peru, Colombia, Honduras or nations that benefit from a General Preferential Tariff.

While there was a “significant” increase in imports of concrete reinforcing bar and energy tubular products, the tribunal said it was not big enough to cause serious harm to the local industry.

Import tariffs benefit Canadian steel producers owned by Stelco Holdings Inc and ArcelorMittal.

The tariffs kicked off a race to get metal into the country before quotas were filled, especially on Canada’s coasts, where it is usually cheaper to buy steel overseas than to ship it from mills in central Canada.

Wednesday’s recommendation has no impact on Canada’s separate retaliatory tariffs on U.S.-made steel.

Reporting by Allison Martell in Toronto, additional reporting by Steve Scherer in Ottawa; Editing by Chris Reese