Trade Cases
Canada Trade Inequity: Fact or Hype?
Written by Sandy Williams
June 11, 2018
Is Canada really guilty of the trade inequity that President Trump charges? We looked at two product targets of the administration—dairy and automobiles—to find out.
The office of the U.S. Trade Representative estimates trade with Canada in 2017 totaled $673.9 billion–$341.2 billion in exports and $332.8 billion in imports, for a goods and services trade surplus for the U.S. of $8.4 billion.
The services part of that equation is what creates the surplus. Exports of services from the U.S., like travel, computer software and management services, totaled an estimated $58.7 billion in 2017, approaching double that of services imported from Canada at $32.8 billion. Removing services from the equation, the U.S had a trade deficit of $17.5 billion with Canada, according to Commerce data.
Trump wrote on Twitter, after leaving the G7 summit, that steel and aluminum tariffs were in response to a 270 percent tariff by Canada on dairy products. Notwithstanding the fact that Section 232 tariffs are supposedly predicated on national security threats, not milk, Canada does indeed have a high tariff to protect its dairy industry, which kicks in once U.S. imports exceed 10 percent of the Canadian market.
In the latest figures from 2016, however, the U.S. exported five times as much dairy to Canada as it imported. Despite paying higher prices, last year Canada bought $792 million worth of dairy products from the U.S. while exporting only $149 million to the U.S., according to data from the U.S. Dairy Export Council and the Canadian government.
The U.S. dairy industry hoped to take a larger part of the Canadian market through the NAFTA agreement, but was stymied by Canada’s “supply management program” that controls dairy supply and prices. Neighboring Wisconsin produces more dairy products than all of Canada and was a strong supporter of Trump. California, another sizable dairy region, exports about 12 percent of its products across the northern border.
When Canada included an ultra-filtered milk product under its supply management rules last year, the U.S. industry lost millions and exports of the product from Canada tripled. The dairy industry was a fervent lobbyist for a renegotiation of the North American Free Trade Agreement and Trump was willing to oblige his political constituency.
Now Trump is promoting a Section 232 tariff on automobiles and parts in response to Canada’s “massive tariffs” and “flooding” of the U.S. market with Canadian built vehicles. The USITC estimates vehicle imports from Canada to the U.S. totaled $56 billion in 2017.
“Autos [and related parts] represent just under 20 percent of our goods exports to the U.S. The products covered under the steel and aluminum tariffs are only about 4 percent,” said Royce Mendes, senior economist at CIBC World Markets in comments to CBC/Radio Canada.
“However, the U.S. administration should tread carefully. A major portion of the automotive products we ship south are made up of U.S. parts.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/sandy-williams.jpeg)
Sandy Williams
Read more from Sandy WilliamsLatest in Trade Cases
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/galvanized_coil.png)
Leibowitz: The consequences of a new barrage of trade cases on coated steel
Domestic steel producers and the United Steelworkers (USW) union filed a barrage of trade cases last week. This is hardly news. Ever since the Commerce Department ruled that Vietnam is still treated as a nonmarket economy (NME) for antidumping purposes, many in the business expected new cases on the product that Vietnam excels at—“corrosion-resistant steel.” Nor is it a surprise that these cases roped in nine countries in addition to Vietnam: Australia, Brazil, Canada, Mexico, the Netherlands, South Africa, Taiwan, Turkey, and the United Arab Emirates. All these countries rank in the top ten exporters of corrosion-resistant steel to the United States. These petitions are a broadside against coated flat-rolled steel imports.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/investigate.png)
Coated trade case alleges hefty dumping margins
Domestic mills have alleged substantial dumping margins in the trade case targeting imports of corrosion-resistant steel.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/fist.png)
US mills file sprawling trade case against coated imports from 10 nations
US mills have filed or soon will file a sprawling trade petition against imports of coated flat-rolled steel from 10 countries. The petition seeks anti-dumping margins against Canada, Mexico, Brazil, the Netherlands, Turkey, the United Arab Emirates, Vietnam, Taiwan, Australia, and South Africa. It also seeks countervailing duty margins against Canada, Mexico, Brazil, and Vietnam. That’s according documents dated Sept. 5 and addressed to Commerce Secretary Gina Raimondo and International Trade Commission (ITC) Secretary Lisa Barton.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/cbd2ad03f626e665deb71b2742b25bbb.jpg)
Steel Summit 2024: Trade issues abound ahead of election
Trade is always front and center in an election year. And 2024 is no different. There is no shortage of issues, with questions like the sale of U.S. Steel to Japan’s Nippon Steel, potential cracks in the USMCA, and Chinese overcapacity dominating the headlines. But how do you distinguish between issues that might just last until November, and what are the crucial questions that could affect your business for years to come?
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/fist.png)
US senators urge reduction to S. Korean OCTG quota
https://www.brown.senate.gov/newsroom/press/release/sherrod-brown-casey-fetterman-biden-administration-level-playing-field-american-octg-industry