Steel Mills
Canada Offers Aid to Steel Producers Hit by U.S. Tariffs
Written by Sandy Williams
January 10, 2019
U.S. tariffs on steel imports from Canada continue to put pressure on Canadian producers while goverment officials seek an ending to the trade measures.
Algoma Steel, which recently emerged from bankruptcy protection, is one of the vulnerable steel producers affected by Section 232. The second largest mill in Canada is expected to receive up to $90 million from the federal government on Thursday. The funding will include a $60 million loan from the Federal Economic Development Agency for Southern Ontario and $30 million from a $250 million Strategic Innovation Fund. The funding will help finance a $300 million capital investment to improve and expand Algoma operations.
“There’s a belief by our government that Algoma Steel is and will continue to be commercially viable, and in fact, it’s commercially viable even with the tariffs,” said Northern Development and Mines and Indigenous Affairs Minister Greg Rickford in an interview with CBC News. “We remain concerned that, as a commodity, if the price point for steel drops, that will increase the risk.”
The Strategic Innovation Fund is part of a $2 billion assistance program announced for the steel, aluminum and manufacturing industries last summer. Last October, ArcelorMittal Dofasco received nearly $50 million from the government for modernization and training.
Signing of the new North American trade agreement was expected to result in Section 232 tariffs being lifted on Canada. So far, little progress has been made in removing the trade measures.
“They’ve let (tariffs) go on for far too long,” added Rickford. “In the absence of that tariff, our steel industry would be robust, given the current demand and the (high) market price — both of which helped Algoma get out of bankruptcy and made it look like a safe bet again.”
Prime Minister Justin Trudeau spoke by phone with President Trump on Friday, discussing the importance of trade and jobs, as well as addressing steel and aluminum tariffs, but without resolution.
Senate Finance Committee Chairman Chuck Grassley (R-IA) plans to urge the president to lift the tariffs on Canada and Mexico and will oppose giving Trump any additional authority to impose tariffs on imports. The Trump administration is currently reviewing whether to impose Section 232 tariffs on imports of autos and auto parts.
“While I strongly agree with President Trump that we must have fair trade deals that benefit Americans, I do not believe that we should alienate our allies with tariffs disguised as national security protections. And certainly not when it comes to trade in automobiles and auto parts,” Grassley said in a Wednesday statement outlining his priorities as chairman. “For this reason, I intend to review the president’s use of power under Section 232 of the Trade Act of 1962, which grants the president broad legal authority to impose tariffs in the name of national security.”
Sandy Williams
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