Canada

The short answer is yes.  To the extent that steel safeguard duties were applied to imports of (1) concrete reinforcing bar, (2) hot-rolled steel sheet, (3) pre-painted steel, (4) energy tubular products and/or (5) wire rod, the safeguard duties were discontinued on April 28, 2019.  On April 26, 2019, Canada’s Department of Finance announced that 25% safeguard duties would be discontinued  on the 5 steel products because the Canadian International Trade Tribunal’s April 3, 2019 Report did not recommend definitive safeguard measures on the 5 steel products.

It is important to note that the 25% countermeasures surtax against U.S.-origin steel still applies against imports of (1) concrete reinforcing bar, (2) hot-rolled steel sheet, (3) pre-painted steel, (4) energy tubular products and/or (5) wire rod, unless an exclusion or exemption has been granted.  The relief only applies to Canada’s provisional global safeguard measures that commenced on October 25, 2018.  The countermeasures that started on July 1, 2018 against U.S. steel is different.

Refunds

Canada’s Department of Finance informally advised the Canadian Society of Customs Brokers that the Government of Canada intends to refund any provisional steel safeguard duties imposed on imports of (1) concrete reinforcing bar, (2) hot-rolled steel sheet, (3) pre-painted steel, (4) energy tubular products and/or (5) wire rod.  Most of these steel products entered Canada under the benefit of import permits and duties were not collected.  However, to the extent that tariff rate quota (TRQ) was not obtained by an importer and 25% provisional safeguard duties was paid, then a refund would be available. The Government of Canada has not yet posted the form to be completed to obtain a refund.  It is presumed that any notice about refunds will be posted on the CBSA website page for steel safeguards.

It is not known whether refunds will be offered with respect to 25% provisional steel safeguard duties imposed on imports of heavy plate and stainless steel wire from South Korea, Panama, Columbia and Honduras.  The Canadian International Trade Tribunal recommended an exclusion for imports from these countries.

Next Issues

It appears that the steel protectionism is not over in Canada.  The Canadian Steel Producers Association has asked the Government of Canada to ignore the CITT Report and impose definitive safeguard duties on the 5 steel products.  They also voiced displeasure with the April 26, 2019 announcement to discontinue the provisional safeguard duties against the 5 steel products.  To appease the Canadian steel producers, the Department of Finance announced “an intensive 30-day consultation with industry and workers, in order to determine what further protections are required. This working group will ensure that the views of workers and industry continue to be heard and are acted upon without delay.”  The Department of Finance has indicated a willingness to consider new measures on the 5 steel products (and other steel products), such as:

  • Conducting a timely and targeted review of dumping cases to boost protections through higher duties to ensure Canadian companies are not at an unfair disadvantage with foreign competitors.
  • The introduction of a more robust steel import regime with a view to strengthening import data, including product quantity, type and origin information. This would enhance Canada’s ability to monitor import surges, assess evidence of transshipment and be more responsive to sudden changes in trading patterns.
  • Greater flexibility for the Canada Border Services Agency to address price and cost distortions in foreign markets when determining whether dumping has occurred.
  • In cooperation with industry, develop a framework to help guide the Canada Border Services Agency in determining when trade remedy actions should be self-initiated.
  • Consult with stakeholders on the framework for remission of surtaxes imposed on imports from the U.S. in order to further incentivize the use of Canadian-made steel products.
  • The Government will also ensure that support for domestic producers provided through Innovation, Science and Economic Development Canada and its agencies is responsive to the evolving needs of steel and aluminum companies by making use of program flexibility.

What this means is that it is likely that new steel battles are on the horizon.  If goods are not subject to antidumping duties in Canada, the CBSA may start to self-initiate cases.  If steel products are already subject to antidumping duties, the CBSA may commence reinvestigations of normal values, export prices and subsidies in order to limit imports of steel products into Canada. Canada may amend the Special Import Measures Act in order to calculate higher dumping margins, subsidy rates and normal values.  The Special Import Measures Act may be amended to allow the CBSA to ignore actual costs of production of some foreign steel producers.  Canadian trade remedies may become more complicated so that fewer foreign producers will be interested in the Canadian market.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com.  LexSage represented importers on pre-painted steel and energy tubular products in the steel safeguard proceeding before the Canadian International Trade Tribunal.