Backgrounder – Support for Canadian Steel Producers Through Provisional Safeguards on Certain Steel Imports

To stand up for Canada's steel industry and to support Canadian workers and businesses, the Government of Canada is taking further steps to prevent diversion of foreign steel products into Canada.

The Government of Canada is imposing provisional safeguards on imports of seven products: heavy plate, concrete reinforcing bar (rebar), energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire and wire rod (see Annex A for detailed product descriptions). The provisional safeguards will come into force on October 25, 2018.

The Government is also requesting that the Canadian International Trade Tribunal (CITT) conduct an inquiry to determine whether final safeguards are warranted and, if so, to recommend appropriate remedies. The provisional safeguards will be in place for 200 days pending the CITT findings and recommendations.

Under the World Trade Organization Agreement on Safeguards and the Customs Tariff, global safeguard measures may be applied if there is evidence that a product is being imported in such increased quantities, and under such conditions, as to cause or threaten to cause serious injury to domestic producers. In critical circumstances where delay may cause damage that would be difficult to repair, provisional safeguard measures may be applied for up to 200 days on the basis of a preliminary determination pending the final results of an investigation.

Form of Provisional Safeguard Measure

The provisional safeguards announced today will be in the form of a tariff-rate quota, with a 25-per-cent surtax applied to imports of the seven products identified above that exceed a specified quantity threshold. To facilitate the administration of the tariff-rate quota, the products subject to provisional safeguards will also be added to the Import Control List. Global Affairs Canada will be responsible for administering the quota of products to be imported surtax-free through the issuance of import permits. Key elements of the tariff-rate quota include:

  • Total quota volume: For each steel product category, there is a limit on the total quantity of goods that may be imported surtax-free during the provisional safeguard period. The total quota volume is established based on the average volume of goods imported over a similar period covered by the provisional safeguard in the years 2015-16, 2016-17, and 2017-18. 
  • Quota periods: The total quota volume is separated into four 50-day periods. Once the quota for a steel product category in a particular period has been filled, imports of goods under that steel product category will be subject to a surtax for the remainder of that period. Any remaining quota at the end of a period will be rolled over into the subsequent period.
  • Quantitative limit: For each steel product category, a limit is imposed on the share of the total quota that may be filled by a single country. This limit is equal to the highest import share from a single country based on historical import volumes for that product. If the volume of imports of a product category from a single country reaches the limit, then all subsequent imports of that product category from the country will be subject to the surtax for the remainder of the 200-day provisional safeguard period.

See Annex B for additional details on the tariff-rate quota volumes.

In accordance with Canada's international trade obligations, the provisional safeguard will apply to all countries except for the following:

  • U.S.: Imports of all product categories are exempt, as they were determined not to contribute importantly to serious injury, or threat of serious injury, given Canada's imposition of a 25-per-cent surtax on certain steel imports from the U.S. since July 1, 2018.
  • Chile, and Israel or other beneficiary of the Canada-Israel Free Trade Agreement: Imports of all product categories are exempt, as they do not account for a substantial share of total imports.
  • Mexico: Imports of heavy plate, rebar, hot-rolled sheet, pre-painted steel and stainless steel wire are exempt, as imports from Mexico of these products do not account for a substantial share of total imports for those products. However, energy tubular products and wire rod imported from Mexico are subject to the provisional safeguard.
  • Developing countries: Imports of all product categories from beneficiaries of the General Preferential Tariff are exempt, as they do not account for a substantial share of total imports, with the exception of imports of rebar from Vietnam, which are subject to the provisional safeguards.  

Global Affairs Canada and the Canada Border Services Agency will be responsible for administering the provisional safeguards. Additional information on the administration of these measures can be found at the links below:

Annex A – Steel Products Subject to Provisional Safeguards

Heavy Plate

Product Definition

Hot-rolled carbon steel plate and high-strength low-alloy steel plate not further manufactured than hot-rolled, heat-treated or not, in widths from 80 inches (+/- 2,030 mm) to 152 inches (+/- 3,860 mm), and thicknesses from 0.375 inches (+/- 9.525 mm) to 4.0 inches (101.6 mm), with all dimensions being plus or minus allowable tolerances contained in the applicable standards. For greater certainty, these dimensional restrictions apply to steel plate, which contains alloys greater than required by recognized industry standards provided that the steel does not meet recognized industry standards for an alloy-specification steel plate.

The definition excludes:

  • All plate in coil form, and
  • All plate having a rolled, raised figure at regular intervals on the surface (also known as floor plate).

HS Codes

Heavy plate is commonly imported under the following 10-digit HS numbers:

7208.51.00.10; 7208.51.00.93; 7208.51.00.94; 7208.51.00.95; 7208.52.00.10; 7208.52.00.93; 7208.52.00.96

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition. 

Concrete Reinforcing Bar

Product Definition

Hot-rolled deformed steel concrete reinforcing bar in straight lengths or coils, commonly identified as rebar, in various diameters up to 56.4 millimeters, in various finishes.

The definition excludes:

  • plain round bar;
  • fabricated rebar products; and
  • 10-mm-diameter (10M) rebar produced to meet the requirements of CSA G30 18.09 (or equivalent standards) and that is coated to meet the requirements of epoxy standard ASTM A775/A 775M 04a (or equivalent standards) in lengths from 1 foot (30.48 cm) to 8 feet (243.84 cm).

HS Codes

Concrete reinforcing bar is commonly imported under the following 10-digit HS numbers:

7213.10.00.00; 7214.20.00.00

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition. 

Energy Tubular Products

Product Definition

Carbon and alloy steel energy tubular products, including line pipe, tubing, and casing, finished or unfinished, welded or seamless, having a nominal outside diameter from 2.375 inches (60.3 mm) to 60 inches (1,524 mm) (with all dimensions being plus or minus allowable tolerances contained in the applicable standards), heat treated or not heat treated, regardless of length, wall thickness, surface finish (coated or uncoated), and end finish (plain, bevelled, threaded, or threaded and coupled), in all grades, meeting or supplied to meet American Petroleum Institute (API) 5L, API 5L-B, API 5CT, Canadian Standards Association (CSA) Z245.1, International Standards Organization (ISO) 3183, American Society for Testing and Materials (ASTM) ASTM A333, ASTM A106, ASTM A53-B or their equivalents or enhanced proprietary standards, whether or not actually certified or stenciled, whether or not meeting specifications for other end uses, including single-certified, dual-certified or multiple-certified, for use in oil and gas, piling pipe, or other applications.

For greater certainty, the product definition includes casing and tubing that are referred to as "green tubes" in the industry. These are formed tubes with the requisite chemistry and dimensions of casing or tubing, but that require further processing before they may be used in a well. They are included in the definition above as unfinished, non-heat treated, or plain end pipe. The finishing required may be heat treatment, threading, coupling, testing, or any combination of these processes.

The definition excludes:

  • Drill pipe, pup joints, couplings, coupling stock, galvanized or stainless steel line pipe, and casing or tubing containing 10.5% or more by weight chromium;
  • Submerged arc longitudinal welded line pipe, regardless of grade, outside diameter and wall thickness, in lengths of 60 feet (18.288 m) with no girth welds for exclusive use in slurry or tailings piping systems in oil sands projects and marked "For Use as Slurry/Tailings Pipe Only"; for greater certainty, use in a pipeline meeting CSA Z-662 or as pressure piping meeting CSA B51 Code is not permitted under this exclusion;
  • Submerged arc longitudinal welded line pipe, regardless of outside diameter, wall thickness and length, for exclusive use in high-temperature steam distribution pipelines and marked "For Steam Distribution Only", certified to meet the requirements of CSA Z662-15 Clause 14 or Annex I and certified to have proven fatigue and creep test properties as provided in sections I.2.3.2 and I.3.2.1 of CSA Z662-15 as established by means of a creep test of no less than 10,000 hours carried out in accordance with ASTM E139;
  • Unfinished seamless carbon or alloy steel line pipe in the form of mother tubes having outside diameters of 184, 197, 210, 235, 260, 286, 328, 350, 368, 377, 394, 402, 419, 426, 450, 475, 480, 500, 521, 530, 560, 585 or 610 mm, in wall thicknesses from 9 mm to 110 mm and in lengths ranging from 7.72 m to 15.24 m, not stenciled as meeting any line pipe product specification, but imported for use in the production, and not solely for finishing, of seamless line pipe made to any one or several of API 5L, CSAZ245.1, ISO 3183, ASTM A333, ASTM A335, ASTM A106, ASTM A53 or their equivalents;
  • ASME SA 672 or ASME SA 691 electric-fusion welded steel pipe as certified under the ASME "Boiler and Pressure Vessel Code" rules (and stencilled with at least one of the aforementioned standards), of a length not to exceed 15 feet (4.572 m), for use other than in a CSA Z-662 pipeline application and imported with authorized inspection certificates and applicable ASME Partial Data Reports;
  • Line pipe, regardless of grade, outside diameter and wall thickness, single stenciled as "DNV-OS-F101" for exclusive use in offshore applications and marked "For Offshore Applications Only"; and
  • Welded line pipe having nominal outside diameters from 18 inches to 24 inches (610 mm) (with all dimensions being plus or minus allowable tolerances contained in the applicable standards), regardless of grade and wall thickness, with a manganese content of no less than 16% by weight, for exclusive use in slurry, tailings, and pressure piping systems in oil sands projects, and marked 'Not for CSA Z-662 Applications'. For greater certainty, use in a pipeline meeting CSA Z-662 is not permitted under this exclusion.

HS Codes

Energy tubular products are commonly imported under the following 10-digit HS numbers:

7304.19.00.10; 7304.19.00.20; 7304.29.00.11; 7304.29.00.19; 7304.29.00.21; 7304.29.00.29; 7304.29.00.31; 7304.29.00.39; 7304.29.00.81; 7304.29.00.89; 7305.11.00.10; 7305.11.00.20; 7305.12.00.10; 7305.12.00.30; 7305.19.00.10; 7305.19.00.20; 7306.19.00.10; 7306.19.00.90; 7306.29.00.11; 7306.29.00.19; 7306.29.00.51; 7306.29.00.59; 7306.29.00.61; 7306.29.00.69

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition.

Hot-rolled Sheet

Product Definition

Flat hot-rolled carbon and alloy steel sheet and strip, including secondary or non-prime material, in various widths from 0.75 inches (19 mm) and wider, and

  • for product in coil form, in thicknesses from 0.054 inches to 0.625 inches (1.37 mm to 15.875 mm),
  • for product that is cut to length, in thicknesses from 0.054 inches up to but not including 0.187 inches (1.37 mm up to but not including 4.75 mm).
The definition excludes:
  • flat-rolled stainless steel sheet and strip; and
  • flat hot-rolled, cut to length alloy steel products containing no less than 11.5% manganese, in thicknesses from 0.12 inches to 0.19 inches (3 mm to 4.75 mm).

HS Codes

Hot-rolled sheet is commonly imported under the following 10-digit HS numbers:

7208.25.00.00; 7208.26.00.00; 7208.27.00.00; 7208.36.00.00; 7208.37.00.10; 7208.37.00.20; 7208.37.00.50; 7208.38.00.10; 7208.38.00.20; 7208,38.00.50; 7208.39.00.00; 7208.53.00.00; 7208.54.00.00; 7208.90.00.00; 7211.14.00.90; 7211.19.00.90; 7225.30.00.00; 7226.91.00.00

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition.

Pre-painted Steel

Product Definition

Pre-painted flat-rolled products of non-alloy and alloy steel (not including stainless steel) which are painted, varnished or coated with plastics on at least one side, in coils or cut lengths, in thicknesses up to 0.079 inches (2.0066 mm) and widths up to 61.5 inches (1562.1 mm) with all dimensions being plus or minus allowable tolerances contained in the applicable standards.

The definition excludes:

  • products with a final coating of zinc-dust (a zinc-rich paint, containing by weight 70% or more of zinc); and
  • products with a substrate with a metallic coating of chromium.

HS Codes

Pre-painted steel is commonly imported under the following 10-digit HS numbers:

7210.70.00.00; 7212.40.00.00

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition.

Stainless Steel Wire

Product Definition

Cold drawn and cold drawn and annealed, stainless steel round wire, up to 0.256 inches (6.50 mm) in maximum solid cross-sectional dimension; and cold drawn and cold drawn and annealed, stainless steel cold-rolled profile wire, up to 0.031 square inches (0.787 sq. mm) in maximum solid cross-sectional area.

HS Codes

Stainless steel wire is commonly imported under the following 10-digit HS numbers:

7223.00.00.10; 7223.00.00.20

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition.

Wire Rod

Product Definition

Certain hot‐rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, less than 19.00 mm in actual solid cross‐sectional diameter.

The definition excludes:

  • stainless steel;
  • tool steel;
  • high‐nickel steel;
  • ball bearing steel; and
  • concrete reinforcing bars and rods (also known as rebar).

HS Codes

Wire rod is commonly imported under the following 10-digit HS numbers:

7213.20.00.10; 7213.91.00.11; 7213.91.00.21; 7213.91.00.31; 7213.99.00.10; 7213.99.00.30; 7213.99.00.50; 7227.90.00.10

Please note that these HS numbers are illustrative. There may be goods under the listed HS number that do not fall within the product definition, or goods that are imported under a HS number that is not listed but that fall within the product definition.

Annex B –Tariff-Rate Quota Volumes
Product Quota for each 50-day Period
(tonnes)
Total
200-day Quota
(tonnes)
Maximum Share of Total Quota per Country
Heavy plate 12,918 51,672 23 %
Concrete reinforcing bar 35,332 141,328 23 %
Energy tubular products 64,348 257,392 23 %
Hot-rolled sheet 15,299 61,196 37 %
Pre-painted steel 11,635 46,540 35 %
Stainless steel wire 467  1,868 25 %
Wire rod 11,513 46,052 47 %