U.S. businesses claim Canada is a back door for products from China
CBC
As U.S. President Donald Trump sticks with his campaign of tariffs on imports from Canada, some American industries are accusing Canadian competitors of using cheap materials from China in ways that violate free trade rules and undercut U.S. companies.
The accusations emerged during recent public hearings in Washington into the future of the Canada-U.S.-Mexico Agreement (CUSMA). During the hearings, leaders from a wide range of business sectors urged the Trump administration to renew the trade deal when it comes up for review in July.
However, several industries — from steel producers to truck-parts suppliers to kitchen-cabinet makers — expressed concerns that some Canadian and Mexican companies are exploiting CUSMA’s preferential trade terms by sending products with significant amounts of Chinese-made content into the U.S. market through a back door.
Luke Meisner, counsel for the American Kitchen Cabinet Alliance, told the hearings that Canada and Mexico have become conduits for products from China, circumventing the hefty countervailing duties the U.S. imposed on Chinese-made cabinets and materials in 2020.
"China didn't leave the U.S. market, it just changed the return address," Meisner said. "We closed the front door for China. Canada and Mexico became the side doors."
Over the past five years, Canada "dramatically increased" its imports of made-in-China cabinets and cabinet materials — such as plywood, medium-density fibreboard (MDF) and moulding — while at the same time boosting exports of finished cabinets to the U.S., Meisner said.
"The USMCA should reward real manufacturing, not low-cost assembly of foreign parts," he said, using the U.S. acronym for the trade agreement.
The Trump administration slapped a 25 per cent tariff on imports of cabinets and vanities from Canada and many other trading partners in October, a duty that is set to rise to 50 per cent on Jan. 1.
The tariff was ostensibly aimed at slowing the flow of Chinese-made cabinets into the U.S. from third countries but it is hitting genuinely made-in-Canada products as well.
The Canadian Kitchen Cabinet Association defends its products as Canadian-made, and says the U.S. tariffs will result in even more foreign products being dumped into Canada.
"Our industry also needs protection from cheap foreign imports entering our country," the association told CBC News in a statement.
U.S. companies that produce steel or use it in manufacturing also accused Canadian firms of undercutting American businesses by using cheap inputs from China.
Robert Wahlin, president and CEO of Stoughton Trailers, a Wisconsin manufacturer of transportation equipment such as freight trailers, says his chief concerns are the products of a competitor that’s wholly owned by China International Marine Containers Ltd. (CIMC).
"In a lot of cases, the products will be kitted and moved into Canada from China, and they go through some finished assembly and then they're moved into the U.S.," Wahlin told CBC News in Washington.
