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Canada Announcing Consultations on Chinese Electric Vehicles Supply Chain Overcapacity

The CSPA issued the following press release in response to the Government of Canada’s announcement of consultations on potential policy responses to Chinese overcapacity in electric vehicles supply chains.

"Yesterday’s announcement signals that the federal government is now realizing the devastating impact of Chinese excess industrial capacity on domestic jobs and competitiveness in Canada. But as presented, the consultations are insufficient to address the magnitude of the problem” said Catherine Cobden, President and CEO of the Canadian Steel Producers Association. “As a major player in the automotive supply chain, we urgently call on the government to expand these consultations to include other industry sectors that are at the mercy of intentional actions by China to erode Canada’s competitiveness and that of its allies.”

Canada’s steel industry is a critical supplier to the North American automotive sector. Excess capacity from China is well documented in the steel sector. Over half the world steel capacity resides in China and with a decreased demand on their domestic market, excess steel capacity will further be exacerbated. It is unsurprising that the US government targeted Chinese steel on its May 14 Section 301 announcement. Slated to enter into force on August 1, an additional 25% tariff will be imposed on Chinese steel products entering the US market. Currently, 750,000 tons of Chinese steel is sold on the US market annually, which is expected to be diverted to other markets, unless protections are enhanced. Even with all current trade remedy measures in place in Canada, China nonetheless ranks third in steel export to our country.

“With yesterday’s announcement, Canada is recognizing the threat of Chinese overcapacity on electric vehicle production. The fact is, for the steel industry, the impacts are already here. We need to stand with the United States and ensure action is taken across the automotive supply chain. We need to act, and we need to act fast,” added Cobden.

As it currently stands, over 60% of all Canadian trade remedy measures addressing steel targets China. “Our system is ill suited for challenges of this scale” according to Cobden. “We should be looking at a broad and deep imposition of at least a 25% tariff on all melted and poured Chinese steel products entering Canada,” concluded Cobden. The CSPA remains committed to advocate for this urgent remedy needed by its members across Canada.

About the Canadian Steel Producers Association

The Canadian Steel Producers Association is the national voice of Canada's primary steel and the pipe and tube industry, dedicated to ensuring a competitive and sustainable business environment for its members and supply chain stakeholders. Canadian steel producers are integral to Canada's economy and a vital supplier to many segments of North American industry, including the automotive, energy, construction, and transportation sectors.

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