Canadian Authorities Target Suspected Unfair Trade Practices

The CBSA announced the initiation of formal investigations to determine whether steel strapping originating from China, South Korea, Turkey, and Vietnam is being sold at artificially low prices in the Canadian market, potentially undermining fair competition. Additionally, the agency will examine whether Chinese manufacturers are receiving government subsidies that provide them with unfair advantages over domestic producers. The investigations stem from a formal complaint filed by JEM Strapping Systems Inc., based in Brantford, Ontario, the sole Canadian manufacturer of steel strapping products. JEM alleges that the surge in underpriced imports has resulted in significant business harm, including lost market share, price undercutting, reduced profitability, and employment cutbacks. The investigations represent the latest action in Canada's ongoing efforts to protect domestic industries from potentially harmful international trade practices that could threaten Canadian manufacturing jobs.

Dual-Agency Process to Evaluate Market Impact

The investigation process involves coordinated efforts between two key Canadian trade authorities. The Canadian International Trade Tribunal will conduct a preliminary inquiry to assess whether the imports are causing material injury to Canadian producers, with a decision expected by July 11, 2025. Running parallel to this assessment, the CBSA will investigate the pricing structures and potential subsidization of the imported products, with preliminary findings scheduled for release by August 11, 2025. This dual-agency approach ensures both the economic impact on Canadian industry and the specific trade practices in question receive thorough examination. If either agency determines that unfair trade practices exist and are causing harm to Canadian producers, temporary duties could be imposed while the investigations continue toward final determinations. The process provides multiple opportunities for all parties, including foreign exporters and domestic stakeholders, to present evidence and arguments before final decisions are rendered.

Steel Strapping Market Represents Significant Economic Activity

The Canadian import market for steel strapping products is estimated to be worth approximately $24 million annually, representing a substantial segment within the industrial packaging sector. Steel strapping is widely used across multiple industries for securing heavy loads, bundling materials, and reinforcing packaging for shipping and storage. The material is particularly important in sectors such as lumber, construction, steel production, and manufacturing, where secure bundling of heavy or bulky products is essential. JEM Strapping Systems, as the only domestic producer, competes directly with foreign suppliers for this market. The alleged unfair pricing practices could potentially disrupt not only JEM's business operations but also affect the broader supply chain for industries that depend on reliable access to quality steel strapping products. The CBSA's investigation will examine pricing data across all four named countries to determine if products are being sold below fair market value or production costs.

China Faces Additional Scrutiny Over Subsidization

While all four countries face dumping allegations, China alone is subject to additional investigation regarding potential government subsidization of its steel strapping industry. This reflects ongoing concerns about China's industrial policies and state support for manufacturing sectors, particularly in steel-related industries. The subsidization investigation will examine whether Chinese producers receive financial contributions from government entities that provide unfair advantages, such as preferential loans, tax incentives, discounted raw materials, or other forms of support not available to competitors. If confirmed, such subsidies could allow Chinese manufacturers to offer products at artificially low prices that don't reflect true production costs. This dual investigation into both dumping and subsidization highlights the complex nature of modern trade disputes, where pricing practices often intersect with questions about government industrial policies and market interventions. The findings could potentially result in both anti-dumping and countervailing duties being applied to Chinese imports.

Canadian Trade Remedy System Protects Domestic Industries

The current investigations add to Canada's extensive use of trade remedy measures designed to ensure fair competition between imported and domestically produced goods. Currently, Canada maintains 158 special import measures covering a wide range of industrial and consumer products. According to CBSA data, these existing measures help protect approximately 31,000 Canadian jobs and $11.6 billion in domestic production. Under the Special Import Measures Act, the CBSA has the authority to investigate complaints and impose trade remedy measures when evidence indicates that dumping or subsidizing is causing or threatens to cause injury to Canadian producers. These measures typically take the form of additional duties applied to imports found to be unfairly priced or subsidized, with the goal of leveling the competitive playing field rather than blocking trade entirely. The system aims to balance Canada's commitment to open trade with the need to protect domestic industries from unfair foreign competition.

Detailed Findings Expected in Upcoming Statement of Reasons

The CBSA has announced that a comprehensive statement of reasons providing additional details about the investigations will be published on its website within 15 days of the launch. This document will outline the specific evidence that prompted the investigations, preliminary findings regarding the alleged unfair trade practices, and the methodologies that will be used to determine whether dumping or subsidization has occurred. The statement will also detail the specific products under investigation, including technical specifications and relevant tariff classifications to clearly define the scope of the inquiry. This transparency allows all stakeholders, including foreign exporters, importers, and domestic producers, to understand the basis for the investigations and prepare appropriate responses. Interested parties will have opportunities to provide information and make submissions throughout the investigation process as the agencies work toward their final determinations.

Global Steel Trade Tensions Continue to Simmer

The steel strapping investigations occur against a backdrop of ongoing global tensions in steel and metal products trade. Steel markets worldwide have faced challenges from overcapacity, particularly attributed to Chinese production growth over the past decade. Many countries, including the United States, European Union members, and now Canada, have implemented various trade measures to address concerns about unfairly traded steel products. The inclusion of multiple countries in this investigation, rather than focusing solely on China, reflects the complex global supply chains in the steel industry and recognition that trade diversion can occur when measures target only a single country. As manufacturers seek new export markets in response to trade barriers elsewhere, countries like Canada must continuously monitor import patterns for potential unfair practices. The outcome of these investigations could influence not only the specific steel strapping market but also signal Canada's broader approach to managing trade in steel-related products during a period of significant global market disruption.

Key Takeaways:

• The CBSA is investigating alleged dumping of steel strapping from China, South Korea, Turkey, and Vietnam, along with potential subsidization by China, following complaints of material injury from JEM Strapping Systems Inc., Canada's sole domestic producer

• Canada currently maintains 158 special import measures that protect approximately 31,000 Canadian jobs and $11.6 billion in domestic production, with the steel strapping market alone representing approximately $24 million in annual imports

• Final determinations are expected by July 11 (CITT) and August 11 (CBSA), 2025, with potential duties to be applied if investigations confirm unfair trade practices that harm Canadian industry