Canadian steel industry confident it can avoid potential Trump tariffs

U.S. president-elect Donald Trump has promised sweeping global tariffs in his next term, but the president of the Canadian Steel Producers Association remains confident that industry can come out unscathed.

In 2018, during Trump's first term, the U.S. imposed short-lived tariffs of 25 per cent on Canadian steel products and 10 per cent on Canadian aluminum products.

Catherine Cobden, president of the Canadian Steel Producers Association, which represents all of Canada's steel producers, says times have changed since 2018, and she doesn't expect Canada to be hit by similar tariffs again.

"We have growing and stronger integration of our economies. It was really strong then, but it's even stronger now. We have alignment on key trade tools, key approaches, if you will," she said.

Cobden says Canada supplies around 25 per cent of imported steel in the U.S., and the U.S. represents around 41 per cent of Canada's steel import shares.

"In addition, about half of what we produce in Canada does go to the States," she said.

Integrated economies

Sault Ste. Marie MP Terry Sheehan told CBCRadio he'll be travelling to Washington, D.C.soon, to remind his American counterparts about how closely integrated both countries' steel industries are.

"We prepared ourselves for this election outcome over a year ago by making moves.No matter who was going to be elected, we were ready and continue to be ready," he said.

"We are a small country, but we have major fiscal power and we also are attracting unprecedented investment in this country."

Sault Ste. Marie is home to Algoma steel, one of canada's largest steel making companies.

In October, the Canadian government imposed a 25 per cent tariff on imports of steel and aluminum products from China, following the lead of the U.S.

And this week, the federal government imposed what are called country-of-melt regulations for steel imports as a way of detecting cheap foreign steel being dumped into the Canadian market.

"What this does is for all imports into the country, Canada will now know where the steel was made," Cobden said.

Cobden said the added level of transparency will allow Canada to impose trade sanctions and prevent Chinese steel from overwhelming the market, driving prices down.

Trump has a crazy idea that tariffs are paid by other countries.- Peter Warrian, economist

Peter Warrian, an economist with the Munk School of Global Affairs and Public Policy at the University of Toronto, says China has been exporting record amounts of steel to drive up domestic production.

"They want to keep their people employed, so you start exporting the product," he said.

On Trump's proposed plan for a minimum 10 per cent global tariff, Warrian says the impact on the steel industry could be immediate, even if Canadawas exempted.

"Trump has this crazy idea that tariffs are paid by other countries. They're paid by domestic consumers," Warrian said.

And he suggested increased costs due to tariffs being added could eventually mean diminished demand.

"So if the price of a standard sedan is going to go up by $1,700, people are going to buy fewer of them, Therefore, fewer cars, less steel."