Canadian Plastics

CITT to decide fate of tool steel exemption

Contrary to at least one report sent through electronic mail, the decision on whether tool steels will be exempt fr...

August 7, 2002   Canadian Plastics

Contrary to at least one report sent through electronic mail, the decision on whether tool steels will be exempt from tariffs on imported steel in Canada has yet to be decided. According to Canadian Tooling and Machining Association director Horst Schmidt, steel producers and users (toolmakers and moldmakers) have tentatively agreed on a list of steel types that should be considered tool steels, and therefore exempt from tariffs. It is now up to the Canadian International Trade Tribunal (CITT) to accept these recommendations and prepare a report for submission to the Parliament when it reconvenes in the fall. A formal approval of a tool steel exemption could be expected no earlier than October.
Action to seek a tariff exemption for tool steel is a result of a decision of the CITT to conduct a “safeguard” inquiry to determine if tariffs on imported steel are needed to protect the domestic steel industry. This in turn was set off by a decision by the United States government in March to impose tariffs ranging from 8% to 30% on certain steel products. Canadian domestic steel producers feared steel destined for the U.S. would instead be “dumped” in Canada, and lobbied the CITT to investigate.
Since then Schmidt and his team from the toolmaking and moldmaking industries have been busy laying the ground work for the tool steel exemption.
“It’s been a lot of detail work because basically tool steels are embedded in all categories of steel,” says Schmidt.
He reports that they’ve taken a different approach than their U.S. counterparts for defining categories of tool steel.
“In the U.S. the exemption for tool steel is based on chemistry,” says Schmidt. “The problem with that method is that certain formulas of steel, like high-tech steel from Germany, will not fit in this category and won’t be exempt. Our approach has been to seek an exemption for any steel that is hot-worked after initial casting.”
Schmidt says parties on both sides of the border are working to have a “friendly nation” clause that would exempt all steel flowing across the borders of the U.S. and Canada from tariffs.
“What we want ultimately is a piece of legislation that will be long-lasting and stand up to new issues as they arise,” Schmidt says.


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