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CHINESE STEEL IMPORTS COSTLY

IMPORTING CHINESE STEEL HAS COSTLY CUSTOMS DIMENSIONS

While the recent focus in Canada has been on the tariff war between Canada and the US (for example, President Trump's tariffs on certain imported Canadian steel, and Prime Minister Carney's retaliatory surtaxes on same), what many have overlooked are similar Canadian surtaxes on Chinese steel and aluminum, which pre-date both.

As a number of Canadian importers have figured out, importing Chinese steel comes at a very significant cost on two different fronts.

Canadian Surtaxes on Chinese Steel

In October 2024, Canada implemented the China Surtax Order, which among other things placed a 25% surtax on dozens of steel products, as well as a handful of aluminum products .  While ostensibly brought into law to protect Canadian businesses and industry, this surtax has led to unanticipated costs and complications for Canadian importers.

More problematically, unlike Canadian surtaxes imposed on US steel, the degree of remission afforded to Chinese steel imports is extremely limited.  Canada's China Surtax Remission Order only relieves a fraction of Chinese steel products from Canada's surtaxes, with some relief only open to select groups or specified importers.

Anti-Dumping & Countervailing Duties

In addition to Canadian surtaxes on steel and aluminum, a large number of Chinese-sourced steel and aluminum goods are subject to anti-dumping and countervailing duties under the Special Import Measures Act(“SIMA”).  These are special duties that target foreign goods imported into Canada at costs lower than current market values, harming Canadian producers. 

Each SIMA order targets a specific category of goods from one or more specified place(s).  China is the country targeted by the most Canadian orders, with large duties placed on 34 categories of Chinese exports, including 21 broad categories of steel and aluminum products.  These include steel wire, piping, sheets, bars, plates, casing, and a variety of other industrial steel goods, and a smaller number of aluminum goods.

Applicable SIMA duties vary by product, but several exceed 100%.  Steel pup joints, for example, are subject to a SIMA duty of 173.4%. (!)

In addition to imposing a purely financial cost, complying with SIMA takes a lot of extra work from importers – with it being the importer’s duty to self-assess and ensure proper SIMA compliance.  Where there is non-compliance, Administrative Monetary Penalties (AMPs) are often imposed PLUS the duties and interest that were properly payable in the first place.

Takeaways

Importing steel and aluminum products from China comes with often unanticipated additional costs and administrative hurdles. Canadian Surtaxes, throupled with Canadian anti-dumping and countervailing duties on many Chinese steel and aluminum products make these business inputs among the most expensive in the world.

Moreover, non-compliance attracts further financial penalties, as CBSA will be expected to audit and assess for missed surtaxes and duties, demanding their full payment, plus interest, and tag on AMPs penalties for good measure.

Experienced trade professionals can help.

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