Prime Minister Mark Carney announced on Wednesday that the government was Tightening the rules around steel importsThis step is an attempt to protect Canada’s domestic industry from dumping as the global trade of metal passes through major changes due to government functions outside the United States and China.
There is a look at some major questions here.
What is dumping?
The dumping refers to foreign firms to artificially sell goods at low prices, or prices that do not accurately reflect their cost of production. This may also mean that the company selling goods for less in foreign markets is selling in its home market compared to comparable items.
Companies dump goods by selling below costs to gain market share, or because the excess of production in their home countries is looking for markets to unload them and recover some costs.
Government subsidies can be an important contributor for firms selling at artificial prices as they distort the price structures. Subsidies may involve just giving money to help companies to help them grow, more indirect AIDS such as preference access to land, as well as government loan and loan guarantee and tax breakdown.
The Canadian government uses all these levers to help develop domestic industries, but governments can only go within international trade rules. The subsidy that reduces the cost artificially so that manufacturers can cross the line at the lower prices of foreign markets incorrectly.
What is a big problem steel dumping for Canada?
While dumping cases are determined on specific products, the overall scale of steel imports has become inflamed in the last decade. According to the Canadian Steel Producers Association, in 2014, the Canadian market increased by 19 percent to 39 percent in 2014.
The steel industry also dominates dumping anti-dumping inquiries in the Canadian International Trade Tribunal, the body assigned the task of determining whether the imported goods are being sold at artificially low prices.
The Canadian steel industry has challenged dozens of product categories from cold-rated steel, various wires, piping and rods, including stainless steel sinks. The tribunal has ruled in favor of large -scale applications that dumping has taken place and is damaging the Canadian industry.
And while now there are problems, the big concern is how much product, especially from China, can divert the Canadian market because the US proceeds to shut down imports.
This is expected to be a growing problem in the future as China’s domestic demand is slow. According to Wood McCenzie, China already has a lot of 50 million tonnes in steel production in its 360 mills, but it has been said that overcapacea may increase by 250 million tonnes in the next decade. Meanwhile, Canada’s total production was 12.1 million tonnes in 2023.
How long has it been a problem?
a long time. Canada introduced the first dumping anti-dumping provisions in the world in 1904, in a report, in a report, “Special duty on under-valede goods” according to International Trade Expert Dan Seurk.
What was unique about measurement was that it was a flexible tariff, which meant to differentiate between the selling price and the proper market price.
Global trade has increased, this problem has increased, causing more calls about it.
According to the International Trade Administration, for Steel, concerns increased, as China’s exports had increased by 110 million tonnes in 2015, only to cross that clan with 115 million tonnes in exports in 2024.
Back to 2020, United Steelworkers Union National Director Kane Namman said that the problem of illegal steel dumping needs to be stopped.
“Our Union will continue to aggressively defend the jobs of steelworkers in Canada, who have been dumped steel imports in our country for a very long time and sold in the market prices below, the bottom.”
What to achieve the latest tariff?
Canada already imposed 25 percent tariffs on steel and aluminum imports from China last year, with this step in October.
But the steel industry and others have said that other countries are taking steel produced in China, processing it further and then trying to export it as generated from there.
The latest measures are to help avoid that work. That is why the government imposed 25 percent tariffs on “melted and inserted” steel products in China.
This step is the culmination of years of years of efforts to increase transparency in steel imports, including a requirement that had become effective only for importers in the last November to declare the country that the metal has been melted and inserted.
Catherine Cobden, Cathern Cobden, Canadian Steel Producers Association, said that the measure would go to deal with China’s works as a “arrogant” overcapacea system.
“Canada is taking a direct purpose on global steel overcapsities, and clearly, it’s a strong position, and I think it will be appreciated worldwide. This is something that the United States has not yet done.”