Canada, Mexico exempt from U.S. tariffs for now

By Monte Sonnenberg, Simcoe Reformer

Stelco's Lake Erie plant at Nanticoke.(Brian Thompson/Postmedia News)

Stelco's Lake Erie plant at Nanticoke.(Brian Thompson/Postmedia News)


The president of the local steelworkers union says the United States is inviting “a major calamity” if it slaps tariffs on Canadian steel and aluminum.

Bill Ferguson, president of Local 8782 of the United Steelworkers, represents nearly 1,000 steelworkers at Stelco’s Lake Erie Works in Nanticoke.

Ferguson says American and Canadian steel makers are so closely integrated after 30 years of free trade that it would be a major headache to sort them out.

That’s a real possibility now that U.S. President Donald Trump has announced a 25 per cent tariff on steel imports and a 10 per cent tariff on imports of aluminum.

Ferguson said most steel in this part of North America is processed several times before it is ready for market.

As such, steel is often shipped back and forth across the border before it is finished. Disentangling this relationship, Ferguson said, would disrupt production and manufacturing in a number of sectors and cost jobs in both Canada and the United States.

“It’s an integrated, reciprocal business,” Ferguson said. “Trump could interrupt his own industrial supply line. It doesn’t make sense. There is potential here for a major calamity.”

Trump approved the tariffs Thursday. In doing so, he granted Canada and Mexico a temporary reprieve. The tariffs kick in on other steel-exporting nations March 24.

The jury is out on Canada and Mexico because they and the U.S. are re-negotiating the North American Free Trade Agreement (NAFTA).

Ferguson said it is obvious Trump is using the tariff threat to extract concessions from his northern and southern neighbours. Steel and aluminum production are important generators of good jobs in both countries.

The tariff threat has Ottawa’s attention. Monday, Prime Minister Justin Trudeau announced he will meet this week with industry representatives from coast-to-coast. Trudeau wants to hear their thoughts on the rumblings in Washington, D.C. He will be at Stelco Hamilton Works and ArcelorMittal Dofasco in Hamilton on Tuesday.

“We will always stand up for Canadian steel and aluminum workers,” Trudeau said in a statement.

“This is about defending our country’s primary interests and values so that our industries and businesses can continue to drive economic growth and create the good middle-class jobs we need for our future prosperity.”

The Trudeau government’s penchant for raising Canadian “values” during trade talks is making the opposition in Ottawa nervous. And so is the fact that Finance Minister Bill Morneau made no provisions for a trade war with the U.S. in his recent budget.

The Trudeau government’s promotion of women’s rights, climate-change and other social-justice initiatives has complicated trade talks with a number of international parties over the past two years.

On Monday, Haldimand-Norfolk MP Diane Finley said international trade is complex enough without throwing social issues into the mix. Finley says this has shut the door in Asia and is beginning to have the same effect in Washington.

“Trump has made it clear he doesn’t want to talk about these things,” Finley said.

Finley added the Trudeau government stands to be caught flat-footed if there is a trade war with the Americans. Conservatives in Ottawa, she said, have yet to hear how the governing Liberals would respond if tariffs on steel and aluminum were applied to Canada.

Ferguson says the looming international trade war over smelted products could benefit Canada if the Trudeau government plays its cards right.

Ferguson says America’s complaint is with unfair trading practices in places like Russia, Ukraine, China, India and Turkey.

These countries, Ferguson said, are so eager to beef up their hard currency reserves that they sell their surplus production to the West below its cost of production. In international circles, this is known as “dumping” and is considered an unfair trading practice.

As for NAFTA, Ferguson said Trump is using “the sledge hammer approach” to leverage his position.

“He’s saying `I’m going to slap tariffs on everything: Now tell me why I shouldn’t,’” Ferguson said.