3 days ago
What doubled U.S. steel tariffs could mean for Saskatchewan
Saskatchewan businesses share concerns about the future of the steel industry as the U.S. plans to raise tariffs to steel imports to 50 per cent.
Saskatchewan is preparing for more trade uncertainty as the U.S. announces plans to raise tariffs on steel imports to 50 per cent.
On Friday, U.S. President Donald Trump announced he would double the current rate for steel and aluminum imports – potentially increasing the costs for cars, tools, and machines.
As a result, the Saskatchewan Mining Association said the future of the steel industry continues to be unclear.
'There's a certain level of uncertainty and unpredictability that has to be costed into projects,' said the association's president, Pam Schwann.
With the current tariff rate sitting at 25 per cent, Schwann said companies have already felt the implications and continue to build 'potential increases in tariffs into their cost projections.'
'Everyone around the globe is facing a lot of uncertainty right now with the United States' trade practices,' she explained. 'We are looking at alternate sources as well that maybe aren't coming from the States to help improve our optionality.'
Keith Willoughby, professor of management science and dean of the Edwards School of Business at the University of Saskatchewan, said the tariffs may very well lead to economic instability - if they're imposed for a long period of time.
'From a Saskatchewan side thus far, we've been fortunate because 45 per cent of our trade goes to countries not in the United States. We have been good in the past at diversifying our markets and exploring other situations,' he explained.
'The challenge though with steel and aluminum is it's a special case because as far as I understand it most of our trade, over 90 per cent, is going south of the border.'
Willoughby said higher tariffs may also affect production costs on both sides of the border.
'Even though steel and aluminum is a fraction of our export equation, it still is a $400 million piece and because of a lot of it is going south of the border,' he said.
'I think that's where we could see some increased turbulence.'
He added that a similar situation happened during Trump's first term, where steel and aluminum tariffs were 'reduced largely' after American auto manufactures raised concerns about paying higher prices for Canadian materials.
With Trump's plan to impose the 50 per cent tariff rate on steel imports as soon as June 4, Willoughby recommends businesses on both of the border communicate with one another.
'It would be important for the American companies to be aware that if they don't have access to the lower price and better grade Canadian steel and aluminum, they would suffer in terms of their ability for production and fabrication of products,' he said.
'That's why it would be important for our economy, our government, and individuals to continue the conversation.'
