The decision by the Liberal government to exclude certain Chinese and U.S. steel and aluminum imports from retaliatory tariffs is sparking controversy. A recent order-in-council reveals that Ottawa has provided relief to numerous Canadian companies, exempting them from paying tariffs on specific products deemed scarce or necessary under existing contracts.
The Canadian Steel Producers Association is expressing disappointment over the broad exemptions granted to U.S. producers for an additional two months, while Canadian producers face limited access to the U.S. market. The association’s CEO and president, Catherine Cobden, criticized the decision, particularly the new exemptions for Chinese steel imports, labeling them as “unfair” and stressing that Canadian producers can substitute the imported steel.
Calls from the steel industry for stronger actions against China due to what they perceive as an increase in unfairly traded steel imports have been ongoing. Canada currently imposes a 25 per cent tariff on Chinese aluminum and steel. Cobden has urged Ottawa to match the 50 per cent tariff imposed by U.S. President Donald Trump on Canadian steel imports.
Ontario Premier Doug Ford recently urged Prime Minister Mark Carney to retaliate against the U.S. following Stellantis’ announcement of relocating Canadian Jeep production to the United States. Carney, in response, stated that he is refraining from immediate retaliatory measures as negotiations with the U.S. are underway to secure relief for sectors such as aluminum, steel, and energy.
Finance Minister François-Philippe Champagne described the exemptions as a means to safeguard Canadian workers and families from adverse impacts caused by countermeasures. International trade lawyer William Pellerin highlighted the significance of the exemptions for Canadian manufacturers, enabling them to import foreign steel or aluminum without incurring tariffs, thus supporting competitiveness and pricing.
While the exemptions benefit Canadian companies, they also extend to some Chinese and U.S. manufacturers, with the total trade value affected remaining uncertain. Pellerin noted that while significant for individual Canadian firms, the exemptions may not greatly impact broader negotiations with the U.S. The government has extended exemptions for U.S. products used in food and beverage packaging and introduced a new exemption for agricultural production.
Several companies nationwide, including Pizza Trucks of Canada and Pivotech Doors, among others, have received specific exemptions, allowing them to import certain goods without tariffs. Champagne, along with U.S.-Trade Minister Dominic LeBlanc and Canada’s top public servant Michael Sabia, have been engaged in discussions in Washington to progress talks further.