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U.S. to impose tariffs on tin mill steel from Canada, China, Germany

Smoke from a steel plant in Hamilton, Ont. rises against a setting sun, as smoke from wildfires blankets the sky on Wednesday, June 7, 2023. (THE CANADIAN PRESS/Chris Young) Smoke from a steel plant in Hamilton, Ont. rises against a setting sun, as smoke from wildfires blankets the sky on Wednesday, June 7, 2023. (THE CANADIAN PRESS/Chris Young)
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WASHINGTON -

The U.S. Commerce Department on Thursday said it will impose preliminary anti-dumping duties on tin-plated steel imports from Canada, Germany and China, sparing five other countries in a decision that drew some relief from food can manufacturers that had feared higher tariffs.

The department said the highest preliminary anti-dumping duties of 122.5% will be imposed on tin mill steel imported from China, including the country's largest producer, Baoshan Iron and Steel.

The department will impose preliminary duties of 7.02% on tin mill imports from German producers, including Thyssenkrupp and 5.29% on imports from Canadian producers, including ArcelorMittal.

No duties will be imposed on the shiny silver metal - widely used in cans for food, paint, aerosol products and other containers - imported from Britain, the Netherlands, South Korea, Taiwan and Turkey, the Commerce Department added.

A Commerce Department official told reporters that producers in Canada, Germany and China were found to be selling tin mill steel at prices below those in their home markets. China's rates were higher because a lack of cooperation from a major producer in the investigation led to an "adverse inference" determination, while other respondents could not prove that they were independent of the Chinese government, the official added.

The closely watched case was initiated in February after a petition from a single U.S. steelmaker, Cleveland-Cliffs, alleged foreign dumping in the tin-plate sector, which has seen several U.S. production facilities close in recent years.

The Commerce Department in June announced preliminary anti-subsidy duties of 543% on tin mill imports from Baoshan Iron and Steel and 89% on those from all other Chinese producers as part of a separate, parallel investigation.

The other countries cited in Thursday's decision were not subject to anti-subsidy investigations.

HIGHER COSTS?

The Can Manufacturers Institute, a trade group, argued prior to the decision that because U.S. steelmakers currently produce less than half of the tinplate needed for domestic can manufacturing, any new import duties will lead to higher material costs and food prices at a time when inflation remains elevated.

A bipartisan letter from members of Congress in June also argued that high anti-dumping duties would raise costs for canned packaging for food and aerosol products and could help Chinese producers of canned goods, leading to increased canned food imports from China.

But the duties were significantly less than initially feared. In its initial petition, Cleveland-Cliffs asked the Commerce Department to imposed anti-dumping duties of 79.6% on imports from Canada, 70.2% on Germany, 111.92% on Britain, up to 110.5% on South Korea, up to 296% on the Netherlands, up to 60% on Taiwan and up to 97.2% on Turkey.

In a statement, the Can Manufacturers Institute said it was "thankful" that most of the high duties requested by Cleveland-Cliffs were not imposed.

"We are hopeful the final Commerce determination will eliminate the proposed duties on Canadian and German tin mill steel," said Robert Budway, the group's president.

"U.S. tin plate prices already remain the highest in the world due to the 232 tariffs, placing domestic can makers at a competitive disadvantage to foreign imports of unfilled steel cans and foreign filled food products," Budway said, referring to the "Section 232" tariffs on global steel and aluminium imports first imposed by the Trump administration.

The five countries that escaped duties account for about half of U.S. tin mill steel imports, while China accounts for about 14% and Canada and Germany account for about 30%, the Commerce Department official said.

The tariffs decision was announced less than a week after Cleveland-Cliffs announced a buyout offer of its major competitor in the tin-plate sector, U.S. Steel, an acquisition that would accelerate consolidation among American steel producers. Cleveland-Cliffs Chairman Lourenco Goncalves has repeatedly argued in favour of the need to maintain the 25% "Section 232" national security tariffs on imported steel imposed by the Trump administration.

Cleveland-Cliffs in 2020 acquired AK Steel and ArcelorMittal's U.S. assets, making it the largest U.S. producer of blast-furnace steel made from iron ore.

(Reporting by David Lawder and Susan Heavey; Editing by Chizu Nomiyama and Paul Simao)

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