Canadian Prime Minister Justin Trudeau said at a public event Thursday that Canada’s steel imports were no threat to American national security.
An ongoing investigation by the Trump administration is exploring whether foreign-made steel imports pose a risk to American defence forces.
“I made this point directly to the President, that Canada has no business being on a list of possible national security concerns and I am confident we’re moving in the right direction on that,” Trudeau said at the event. The two leaders spoke last Friday.
The probe was ordered by U.S. President Donald Trump this past April under the rarely used section 232 of the Trade Expansion Act of 1962. The investigation will assess whether there is excessive reliance on foreign steel imports that impedes the operation of domestic producers. The administration claims that the lack of domestic producers could harm the United States’ ability to support its armed forces.
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Foreign steel companies however, are concerned that the probe may be a way to prop up American jobs — the preservation of which played a significant role in Trump’s presidential campaign. Trump has been a vocal critic of the North American Free Trade Agreement (NAFTA) both during the campaign and throughout his first months in office.
Section 232 allows for action to take retaliatory measures to be taken if the investigation finds that the U.S. steel industry has been hurt by excessive imports. Commerce Secretary Wilbur Ross told Reuters that should the investigation demonstrate this, he would recommend “retaliatory measures that could include tariffs.”
Several bodies are concerned about the broad scope of the investigation. The European Union for example, expressed fear that EU steel exports could be included.
“The EU is a NATO partner of the U.S., therefore this doesn’t make sense. The EU should have a full exemption from 232 measures,” European Steel Association (Eurofer) Chief Axel Eggert told Reuters.
“We fear there could be a broad application of section 232 that would be reason enough to provoke a reaction from the EU under WTO rules. The Commission is looking into all the options,” he added.
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These investigatory efforts are largely directed at Chinese steel producers, which Chinese have reportedly routed steel and aluminum through countries like Vietnam to avoid American duties and scrutiny. Secretary Ross added that the investigation was spurred by the fact that Chinese steel imports made up 26 per cent pf the U.S. market.
Today, China is the world’s largest national steel producer, and makes much more than it consumes.
Despite the focus on China, there has been some concern that Canada’s steel industry could be affected by these measures.
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Trudeau recently expressed confidence that Canada would escape any punitive measures that come from the investigation. He said it was “just silly” to imagine Canadian exports were a threat to the United States, given how closely the two nations’ security forces co-operated.
United Steelworkers, a union representing thousands of aluminum workers across Canada and the U.S., has expressed concerns about this investigation.
“Canadian aluminum, like Canadian steel, is not a threat to American national security. Quite on the contrary, the Canadian industry is a stable and reliable source of aluminum, in close proximity to the American market. It’s a valuable asset coming from a close ally to the United States,” said USW Canadian Director Ken Neumann in a statement.
A report by the International Trade Administration from March 2017 says that Canada is the number one source for steel imports to the United States, followed by Brazil and South Korea. In 2015, Canada exported approximately 60 per cent of its steel to the U.S., which represents a 15 per cent jump from 2014 levels.
Reports from Reuters in March indicated that Canada’s steel industry would suffer under tariffs from the U.S. government because of the integration between the two national industries.
The investigation is still ongoing, but according to American government officials, will soon come to a close.
—With files from Reuters.