Aluminum and Steel: Impacts of Canada-US Commercial Relations

June 4th, 2018

By Didier Culat, lawyer

Last week, significant changes were made to the commercial relations between Canada and the United States. Several facts arising from the North American Free Trade Agreement (NAFTA) discussions must be taking into account by any organization operating in the aluminum industry.

Customs Tariff and Possible Exclusions by the US

Firstly, as a reaction to the customs tariffs imposed by the US government against Canadian exports of steel and aluminum, Canada has announced on Thursday a series of United States products that will also be the object of a customs tariff of 25% or 10% - these will take effect on July 1, 2018. To consult the list of products object of these custom tariffs, click here.

Secondly, by virtue of the interim final rule adopted by the United States Department of Commerce on March 19th, putting in place the custom tariffs against aluminum and steel, a process was established for the request of exclusions to the tariffs whereby businesses may request to the Department of Commerce an exemption that may be granted on a product-by-product basis.

Know that there are currently 11,000 requests that have been made worldwide to the Department of Commerce who has undertaken to take position within 90 working days of the filing of such a request. As of today no decision has been rendered by the Department of Commerce.

Putting Facts into Context

Other interesting facts resulting from the analysis of the National Security justification contained in the 232 reports:

  • Canada has a commercial deficit with the United States in steel. As such we buy more steel from the United States than we sell to the United States!

  • The true explanation behind the decline of the aluminum smelting industry in the United States is principally related to the costs of energy in that country – as such, Québec and its cheap electricity will remain competitive in this domain.

If you export aluminum and steel products in the United States and wish to file a request for exemption with the US Department of Commerce, do not hesitate to contact BCF team.