Manufacture This

The blog of the Alliance for American Manufacturing

Are the Trump national security tariffs having their desired effect?

Time for another steel tariffs update!

A few months ago, Canada was considering erecting safeguard tariffs against certain steel products after America’s broad steel tariffs caused a surge of dubiously cheap imports to wash up in the Canadian market.

It looks like Canada is done considering. Those safeguards are going up. Reports the Wall Street Journal:

The goal of the so-called safeguard measures is to prevent a surge of overseas steel imports from entering Canadian markets. Canada’s steel industry has complained in recent months that U.S. tariffs on steel and aluminum, imposed on national-security grounds and affecting most countries, have caused more shipments of cheap steel to be diverted to Canada from the U.S. …

The new measures could address concerns from the Trump administration that foreign companies are using Canada as a backdoor to move their metals into the U.S., trade watchers say. Canada is trying to convince the U.S. to lift tariffs on steel and aluminum imports from Canada, which it imposed earlier this year on national-security grounds. Canada is the largest foreign supplier to the U.S. of both metals.  

The national security tariffs on steel and aluminum were not lifted as a result of the renegotiated NAFTA, and have been received as an insult north of the border, according to Politico’s Alexander Panetta.   

Look, no one ever expected a government lead by President Trump to be a bastion of grace, or that he'd be a particularly articulate advocate for this effort. But! While these Section 232 tariffs were an ineloquent way to force a reckoning with the global steel overcapacity crisis (their original goal), this result – Canada inoculating its own market against the flood of cheap steel out there – shows that they’re having that effect. The European Union already took a similar safeguard measure. And it looks like Mexico may as well.

Inartful? Arguably so! Hopefully, though, this will continue to train everyone’s focus on the steel overcapacity problem that has cause and where it comes from: