Payment delays and insolvencies will probably increase until the new USMCA trade agreement is ratified and the US import tariff issue is resolved.
- The sector is highly exposed to US import tariffs of 25% on steel and 10% on aluminium, as exports to the US amount to more than 80% of all Canadian steel and metals exports, affecting 45% of domestic steel production. In 2017, steel and aluminium shipments accounted for 3% of Canada’s total merchandise exports to the US, and about 2% of the country’s total exports.
- Currently the impact on the industry is difficult to determine as it is unclear whether the US tariffs will be long lasting for Canada. In any case, with the preliminary agreement of the new USMCA Agreement (replacing NAFTA) the outlook has improved that for Canada the tariffs will be removed in the foreseeable future.
Read the full report here: Market Monitor Steel Metals Canada 2018