Opinion By Hamilton Spectator 1072 Views

Editorial: Ottawa has no choice but to protect Canadian steel

There is an interesting parallel between Donald Trump's tariffs on Canadian steel exports and what federal Finance Minister Bill Morneau announced at a Hamilton steel plant earlier this week.

At ArcelorMittal Dofasco, Morneau announced a 15-day consultation that will lead up to policy decisions intended to protect the Canadian steel industry from a pending flood of cheap foreign steel diverted here due to the Trump tariffs. The measures being considered include a surtax on foreign imports or quotas or a mixture of both.

The idea is to discourage predatory exporters from exploiting the Canadian market now that the American one is much less appealing thanks to the protectionist levies. This sort of measure is unappealing to many who believe in our role as a trading nation, but at this point the government has little choice. It has to do what it can to protect the Canadian industry and the jobs it represents.

The parallel is the rationale Morneau is citing. If it does implement the protectionist measures — and let's be honest, that's what they are — Ottawa will do so using international trade language that allows protectionism in specific and "exceptional circumstances." The circumstances in question are the ones caused by Trump's tariffs, which he justified on the basis of "national security." Not in the sense of Canada being a threat to American security, but rather in the sense that American reliance on Canadian imports is somehow restricting American steelmakers from investing adequately in their own infrastructure, and without an adequately vibrant steel sector the U.S. cannot be considered "secure."

Both the American justification and the one being employed by Morneau are rarely used, and some would argue are suspect. But both are central to the situation we now find ourselves in — wrestling with the most adversarial trade relationship in recent history.

Let's be clear, though. Canada didn't start this. The Trump White House did. In that sense, Ottawa's hand was forced. The arcane language and law of international trade are one thing, but if Trump's actions pose a direct threat to thousands of Canadian jobs, the federal government must be doing — and be seen doing — all it can to counteract that threat.

Morneau must be careful. While the measures being considered are reasonable, they will need to be applied in a way that strikes a balance between protecting Canadian steel and not entirely discouraging imports.

The Canadian Coalition for Construction Steel, which represents construction steel suppliers, fabricators, service centres and importers, warns that the so-called safeguards might put more than 60,000 construction jobs at risk. It argues they could discourage imports to the extent that a shortage might be created, resulting in a construction slowdown.

Other industry experts, though, argue the safeguards are essential, especially with a worldwide oversupply of steel.

Our view is that the Trudeau government is on the right track here. It needs to listen closely during consultations, and then do what it has to do to protect Canadian steel and its thousands of employees. That's job one.