The World Trade Organization on Thursday said it has terminated disputes brought against the US Section 232 tariffs on steel and aluminum by Canada and Mexico after the US agreed in May to remove the import tariffs on the two countries.
In two separate complaints filed with the WTO in June 2018, Canada and Mexico claimed that the US duties of 25% on steel imports and 10% on aluminum imports were inconsistent with provisions of the WTO’s General Agreement of Tariffs and Trade and with the WTO’s agreement on safeguards. China, the EU, Norway, Russia and Turkey also filed requests with the WTO challenging the US tariffs on similar grounds, which are ongoing.
The US in May reached an agreement to remove the Section 232 tariffs on steel and aluminum imports from Canada and Mexico without imposing quotas to cap imports at a certain level. As part of the deal, the countries have agreed to implement measures to prevent imports of steel and aluminum that is unfairly subsidized or sold at dumped prices and prevent the transshipment of such steel and aluminum between countries.
Following the removal of the Section 232 tariffs in May, steel imports from Canada were expected to rise 19% month on month in June, while steel exports from Mexico to the US were expected to be up 23% compared with the country’s May import total, according to steel import licensing data from the Department of Commerce.
Canada was expected to ship 395,480 mt of steel to the US in June, up from May’s final import tally of 331,688 mt, while steel shipments from Mexico were expected to rise to 288,653 mt in June, up from 234,679 mt in May.
The removal of the Section 232 tariffs on Canada and Mexico restores North America’s position as a more integrated steel supply chain and could lead to lower US steel imports from other foreign countries now that traditional suppliers are no longer hampered by tariffs.
Prior to the implementation of the steel tariffs, the US had historically exported more steel to Canada and Mexico than it imported from those countries. The US had a $2 billion surplus in steel trade with Canada in 2017, and its surplus with Mexico totaled $3.6 billion over the course of 2016-2017.