Trade Cases
CSPA on Buy American: “Fifty Percent Was Already Chilling”
Written by Sandy Williams
July 18, 2019
“Discouraged” is how the Canadian Steel Producers Association described its reaction to President Trump’s executive order on sourcing of steel for federal projects in the United States. Increasing the use of American-sourced steel from 50 percent to 95 percent is “a step in the wrong direction,” said CSPA President Catherine Cobden in comments to ConstructConnect.
“It really is a step in the wrong direction between two countries that want to have fair and free trade,” said Cobden. “We are in the middle of seeking ratification of the new United States-Mexico-Canada Agreement (USMCA), as well. Canada and the U.S. share highly integrated steel markets, so it really makes no sense from our perspective to have this sort of requirement placed on us. It has had and will continue to have a negative effect on our industry.”
Cobden said it was important to note that the Buy American restrictions exclude everyone, not just Canadian steelmakers. The new rules will make firms bidding on projects “steer clear of steel from Canada” in order to comply with the new sourcing provisions.
“Fifty (percent) was already having a chilling effect on Canadian steel on those projects and now, moving to 95 percent, that will obviously continue on that trajectory,” said Cobden. “We’re in a better position than many others in the sense that we have North American benefits working with the U.S. and Mexico on our integrated steel markets.”
Cobden said the focus for North American steel industries should be on the problem of global steel overcapacity–steel that is cheap, heavily government subsidized and produced in areas with poor labor laws and lax environmental requirements. “In North America we do not have that…,” added Cobden. “Our view isn’t so much that the U.S. should back down, but that we should work together to combat this global overcapacity and look at ways to strengthen our position.”
Sandy Williams
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