The impending tariffs that will be put in place by the Trump administration on aluminium and steel are already being illegally circumvented by some Canadian companies. In the hopes of stopping the smuggling of cheaper metals, the Canada Border Services Agency (CBSA) announced regulatory changes to prevent this type of crime.
Smuggling Concerns
The Prime Minister of Canada has said he was aware of concerns that countries facing the tariffs could try to ship supplies through Canada and then act as if metals had been produced in his country.
The CBSA will gain new powers to stop companies that are working to smuggle cheap metal. The agency will have greater flexibility in determining whether prices charged in the exporter’s domestic market are reliable or distorted.
“We will not allow North American industries to be hurt or threatened by unfair trade practices, like the diversion of steel and aluminium. Canada will not be used as a backdoor into other North American markets,” Trudeau, the Canadian Prime Minister, said in a statement.
What The Regulations Entail
The CBSA will now conduct scope proceedings and anti-circumvention investigations. A scope proceeding will establish whether certain goods fall within the scope of an existing anti-dumping and/or countervailing measure. Companies can ask the CBSA to conduct a scope proceeding or the agency can find that one is necessary.
Anti-circumvention investigations will be conducted to determine whether the circumvention of an existing anti-dumping and/or countervailing measure is occurring. In other words, if people are trying to engage in smuggling and if violations are found, the Canadian International Trade Tribunal will step in.
Canada is the largest supplier of steel and aluminium to the United States. The Trump administration imposed the tariffs on Canada and Mexico. However, they have been temporarily suspended while the U.S. government reviews the North American Free Trade Agreement.
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