Ottawa has put in motion its latest measures to protect the Canadian steel and aluminum industry by making it harder for Chinese metals to reach Canada.
The move was formalized through regulations shortly after China announced it was imposing 75 percent tariffs on Canadian canola seeds, as first covered by Blacklock’s Reporter.
The measure, first announced by Prime Minister Mark Carney in July, specifically targets Chinese steel and aluminum being transshipped through third countries. Canada had already placed a 25 percent tariff on steel and aluminum from China in October 2024, following a similar move by the U.S. administration under then-President Joe Biden.
Ottawa’s new surtax order on Chinese metals was registered in the Canada Gazette on Aug. 13 and will come into force on Sept. 22. The order amends the Customs Tariff to put a 25 percent tariff on transshipped Chinese steel and aluminum.
The Customs Tariff amendment said China’s steel exports have “surged” to markets in Southeast Asia, Latin America, the Middle East, and North Africa, with those regions in turn increasing their exports. This has resulted in some cases in a massive increase in steel imports from certain countries, such as a yearly increase of imports of 1,163 percent from Malaysia.
The order will require importers to provide certificates proving that goods do not contain steel melted and poured in China. Similar measures will apply to aluminum to ensure the primary aluminum if the goods doesn’t originate from China.
The new tariff is not cumulative, which means if the goods are already subject to a duty under the previous China Surtax Order from 2024, they are exempt.
The Customs Tariff amendment in the Gazette states that the order was made to respond to policies and practices of the Chinese regime that are “contrary to Canadian values that adversely affect, or lead directly or indirectly to adverse effects on, the trade in goods of Canada.”
Some of China’s non-market policies and practices identified by Ottawa include “pervasive” subsidization and limited labour and environmental standards.
The new order also notes that with aluminum exports, the Chinese regime set a self-imposed limit on its production in 2017, but Chinese producers have instead built factories in other countries like Angola, Indonesia, Malaysia, Kazakhstan, and Vietnam.
“Canadian steel and aluminum producers continue to face challenges resulting from global overcapacity, and from products exported from diverse countries that are made from Chinese-produced steel and aluminum,” the order says, noting that this can devalue existing investments and discourage future investments in Canadian steel and aluminum industries.
The notice said that there are currently 10 steelmaking corporations in Canada that operate 16 steel mills in five provinces, with 75 percent of steelmaking capacity located in Ontario and another 15 percent in Quebec. For aluminum, the industry is centred in Quebec, with eight out of nine aluminum mills operating in the province.
While Canada produces around 12.3 million tonnes of steel annually and 3.3 million tonnes of aluminum, China produced over one billion tonnes of steel and 41 million tonnes of aluminum in 2023.
Trade Disputes
The move against Chinese transshipment comes as Canada is involved in trade conflicts with the world’s two largest economies. Ottawa has been implementing various measures to help the domestic steel and aluminum industries, which are facing 50 percent tariffs from the United States.
Aside from the new tariffs, Carney had announced in July that steel products from partners whom Canada does not have a free trade agreement with would see tariff quota rate levels reduced to half of 2024 volumes, while a 50 percent tariff would apply to imports beyond those amounts.
Meanwhile China has started retaliating against Canada’s October tariffs on steel, aluminum, and electric vehicles in March. Beijing’s latest action was announcing on Aug. 12 it would impose 75.8 percent temporary tariffs on Canadian canola, starting on Aug. 14.
The tariffs are part of a preliminary ruling from an anti-dumping investigation the Chinese regime launched last year, which it says found “that canola imported from Canada is being dumped,” affecting China’s domestic industry. Dumping involves selling products to another country at a price below their normal value.
Cabinet ministers reacted by saying that Canada does not “dump” canola. “Our hard-working farmers provide world-class food to Canadians and international trading partners,” said ministers Maninder Sidhu and Heath MacDonald in a statement.
Canola is Canada’s second-largest crop by acreage and is the most valuable principal field crop, having generated $12.9 billion in farm cash receipts in 2024, according to Ottawa.
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