Canadian steel and aluminum industries already reeling from Donald Trump’s 50 per cent tariffs have received another blow — hundreds of products containing the metals have been added to the American target list.
The 407 items, ranging from wind turbines and tractors to baby strollers and furniture, were added to a list of “derivative” products announced Tuesday by U.S. Commerce Secretary Jeffrey Kessler.
“Today’s action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention — supporting the continued revitalization of the American steel and aluminum industries,” Kessler said in announcing the decision.
The new items will face a 50 per cent tariff on the value of any steel or aluminum used, rather than on their entire price. But the message to manufacturers is still clear, said the head of the Canadian Steel Producers’ Association: Use American metals, or else.
“The only off-ramp for a manufacturer seems to be to use American steel,” said CSPA CEO Catherine Cobden, noting that the Canadian steel industry is in a struggle for its very existence.
“It’s death by many many cuts, and this is just the latest,” said Cobden. “This list was much broader than we expected it to be.”
Veteran international trade lawyer John Boscariol said it’s clear the U.S. is ramping up its trade war.
“I think this is a significant escalation for Canadian exporters and producers,” said Boscariol, head of the international trade group at McCarthy Tetrault.
Manufacturers and exporters are facing a double whammy, Boscariol said, noting that they’ll have to take a close look at their supply chains just to figure out how much tariff they could be facing.
“They have to go back and figure out exactly where each component came from,” said Boscariol. “There are all kinds of costs you’re introducing on top of the tariffs.”
In February, Trump imposed a 25 per cent tariff on all steel and aluminum imported to the U.S. In June, he doubled that to 50 per cent.
Already, more than 1,000 jobs in the Canadian steel industry have been lost, and production has slumped by over 30 per cent compared to a year ago, Cobden said.
Now, said Cobden, the U.S. isn’t just targeting Canadian steel and aluminum producers, but also their manufacturing customers.
“Companies will have to make some hard decisions,” Cobden said. “The pain just keeps getting worse for us.”
The latest additions to the tariff list came after consultation with U.S. industry stakeholders. And with another consultation period opening up Sept. 1, Cobden is concerned that the list will grow.
“This is a huge challenge. It’s just going to add more pressure on the domestic industry and supply chain,” said Cobden.
In July, Prime Minister Mark Carney announced a broad range of support for the Canadian steel industry, including caps on imported steel, stiff tariffs if those caps are exceeded, prioritizing the use of Canadian steel in government procurement, and $70 million in new funding over three years to help steel workers get retrained.
“Steel is the very foundation of Canada,” Carney said at the time. “We will need much more of it to launch the projects of national interest that will unfold over the coming decades.”
More action is needed to keep the industry alive, said Cobden, who’s calling on the federal government to retaliate in kind, with a 50 per cent tariff on U.S. steel, as well as a reduction in the import cap for countries Canada doesn’t have an existing trade agreement with.
“There are still over three million tons of U.S. steel coming into Canada every year. That’s something that our producers could definitely take up the slack for,” said Cobden.
Boscariol said the government is faced with a dilemma: Whether or not to retaliate while it’s trying to reach a broader trade deal with the U.S.
“I think the government has to figure out whether or not to keep its powder dry on this,” Boscariol said.
