Steel, Aluminum Tariffs on Canada to Be Lifted Within 48 Hours

The 25 percent Section 232 tariffs on Canadian steel and the 10 percent tariffs on aluminum will be removed within 48 hours, Canada and the U.S. said May 17. When the metals tariffs are removed, Canada will also roll back its retaliatory tariffs, which hit American metals and agriculture, as well as some prepared food. The joint statement said stricter customs enforcement to prevent transshipment will be coordinated between Canada and the U.S.

Moreover, the U.S. and Canada will monitor whether there is a surge in any particular steel or aluminum product, and will consult with the exporting country if there is one. In determining whether any tariff is warranted due to the surge, the countries will treat products poured or melted within the NAFTA region differently than those that were processed in the NAFTA region but poured overseas. Currently, products that undergo substantial transformation within a country are given that country's rule of origin, so downstream producers could have a price advantage if they import dumped metal before producing the specific item.

If consultations are not successful, either the U.S. or Canada can return to a 25 percent tariff on that steel product facing a surge of imports or a 10 percent tariff on that aluminum product that has had a surge of imports. The exporting country's retaliation would have to be limited to steel or aluminum.