Hamilton 'breathing a little bit easier' after Canada exempted from steel tariffs
Steeltown was relieved Thursday to hear U.S. President Donald Trump say Canada and Mexico would be exempted from his 25 per cent tariff on steel – for now, at least.
"We dodged a bullet," said McMaster University business professor Marvin Ryder. "We're breathing a little bit easier."
But the uncertainty lingers as Canada moves into another round of NAFTA negotiations. Trump signaled yesterday he'd hold the exemption as a bargaining chip to play if he didn't get what he wants for the U.S. out of the NAFTA negotiation.
That leaves some vulnerability for Hamilton's steel sector, comprising big companies like Stelco and ArcelorMittalDofasco, as well as many ancillary companies. As many as 40,000 local jobs could be affected if the tariffs were to apply to Hamilton steel.
The steel industry was responsible for nearly seven million tonnes of cargo, including raw materials, in and out of Hamilton's port last year – the largest category of cargo by far.
"If I were those companies, I'd still be investigating and making my cases behind the scenes," Ryder said.
The White House tariff announcement came ahead of a visit to Hamilton and other steel- and aluminum-producing cities that Prime Minister Justin Trudeau is planning for Tuesday.
It's been a roller coaster of a week after Trump made a brief, nonspecific reference to the tariffs proposal last Thursday. Since then, Canadian lawmakers and industry insiders have been lobbying the U.S. to honour Canada's partnership in an enmeshed, integrated steel industry in North America.
In the automotive sector, existing trade rules allow companies to transport steel parts back and forth across the border many times before the part gets used in a vehicle.
The integration between both sides of the border goes back to the auto pact, signed even before the North American Free Trade Agreement, that acknowledged the United States needed Canadian parts to make cars, and vice versa.
"It's been this way for more than 50 years," Ryder said.
Ahead of Trump's announcement, Hamilton Chamber of Commerce CEO Keanin Loomis said the exemption appeared as a "glimmer of hope" that the president was recognizing Canada's "special relationship" with the U.S. on steel trade.
"It'd be far too difficult to disentangle the North American supply chain," he said.
Loomis said Canada now should emphasize achieving "greater regulatory harmonization" with the U.S. with regard to steel produced inexpensively in other counties.
"We need to make sure that we tighten our borders so we don't become the dumping ground," he said.
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