On October 15, 2024, Canada will implement a 25% surtax on a wide range of steel and aluminum products imported from China, marking a notable shift in its trade policy. This measure, announced by the Department of Finance Canada, seeks to address the trade imbalance and provide protection for Canadian industries that argue they are disadvantaged by lower-priced imports from China. The surtax applies to various products, including different types of steel and aluminum, each identified by specific tariff items.
The surtax targets a comprehensive array of steel products. For example, steel ingots (Tariff Item 7206.10.00), which are primary forms of steel, will face the surtax. Additionally, hot-rolled coils (Tariff Item 7208.10.00) and cold-rolled sheets (Tariff Item 7209.15.00) will also be subject to the additional tax. These products span several thicknesses and forms, from ingots to coils and sheets, covering both carbon steel and alloy steel. The inclusion of these various steel types ensures that a broad spectrum of the steel market will be affected by this new policy, aiming to counteract the influx of competitively priced Chinese steel that is seen as disrupting the Canadian market.
Aluminum products are similarly impacted by this new surtax. The tax will apply to a range of aluminum goods, including primary aluminum forms (Tariff Item 7601.10.00) and processed products like aluminum bars and rods (Tariff Item 7604.21.00) and aluminum plates (Tariff Item 7606.12.00). This comprehensive coverage means that most aluminum products imported from China will be subject to the 25% surtax. By targeting these products, the Canadian government aims to address the challenges faced by domestic aluminum producers who argue that Chinese imports, often subsidized and sold at lower prices, undermine their competitiveness.
Several key Canadian firms will be directly affected by the surtax. ArcelorMittal Dofasco, Stelco Holdings, and Alcan Inc., major players in the Canadian steel and aluminum sectors, have long advocated for measures to counteract the impact of low-priced imports from China. These companies have highlighted how such imports have negatively affected their market share and profitability. The surtax is expected to bolster these firms' competitive standing by reducing the volume of cheaper Chinese products entering the Canadian market.
This policy shift aligns with Canada's broader trade strategy, which seeks to address trade imbalances and combat unfair trade practices. The Canadian government has previously engaged in disputes with China over issues related to trade subsidies and practices that distort global markets. By implementing the surtax, Canada is taking a proactive approach to protect its industries and ensure fair competition within its market.
