A number of members participated in a CHHMA webinar last Wednesday (June 26) that provided an update on tariffs and trade news impacting Canadian companies. The presenter was Matt Poirier, Director of Trade Policy, from Canadian Manufacturers & Exporters (CM&E), which the CHHMA is a member of.

It was about a year ago that Mr. Poirer provided a similar presentation around the time that the U.S. steel and aluminum tariffs and Canadian retaliatory counter measures came into effect on July 1, 2018.  Now, as of May 17, 2019, those U.S. tariffs and Canadian retaliatory measures have been lifted.  In addition, Matt advised that 5 of 7 steel safeguards (tariff-rate-quotas) have also been lifted.  Safeguards remain on “heavy plate” and “stainless steel wire” to address any dumping concerns on those materials.  

During this trade crisis over the last year, the Canadian Government introduced some programs to help companies impacted by the tariffs including a Surtax Remission Program where Canadian importers would be eligible for remission of the U.S. surtax assuming they met certain criteria.  This program has also ended after a quick announcement (only 48 hours notice was given) so a number of companies who would have qualified did not get a chance to send in their application.  CM&E has been lobbying the government to allow for a second opportunity to apply and is confident that this will be granted.

Mr. Poirier mentioned that Duty Drawbacks still remain in place which is a refund of customs duties for imported goods if the goods are eventually exported or used in manufacturing and eventually exported.  Drawbacks can also be given when imported goods go beyond their natural shelf life, become obsolete, or become surplus.  Some restrictions apply under NAFTA for goods exported to the U.S. or Mexico. 

On the trade agreement front, the new NAFTA or United States Mexico Canada Agreement (USMCA/CUSMA) has been agreed but awaits ratification by all three countries.  The Canadian Government is pretty much ready to ratify it, and Mexico is waiting to see what the U.S. is doing, so the American political environment (congressional approval etc.) is the main hold-up right now.  In the meantime, the current NAFTA remains in place.

CM&E had been really pushing the Federal Government to get a deal done as the uncertainty was negatively impacting manufacturing investment in Canada so when the deal was finalized, they saw it has a good thing.  Further, the deal streamlines processes and should improve the flow of goods across the border and also takes a new approach of identifying a three country North American trading market that is competing with other blocks around the world.

The next part of the webinar touched upon a couple of political situations impacting trade.  The first being Brexit, which is less of a concern for Canada as most trade with Britain is already duty free, and the second being the U.S.-China trade war which is more of a concern.  Mr. Poirier said it is not a healthy situation to have the two largest economies fighting with each other.  It impacts Canadian companies importing goods from China which are then sold to the U.S. as these will hit the tariffs wall. 

Finally, Mr. Poirier answered a few questions from the participants.  For members who would like some further assistance or information, including legal help, on recovering duties or dealing with other import/export matters, the CM&E has some firms that can put you in contact with on either side of the border.  Please contact Matt at matt.poirier@cme-mec.ca.

Moving forward, the CHHMA is planning on conducting these type of trade updates on a more regular basis (every couple of months) to keep members informed of the latest tariff and trade news impacting Canadian manufacturers/brand owners.