Trade war already felt at home

By Collin Gallant on June 30, 2018.

cgallant@medicinehatnews.com @CollinGallant

Trade wranglings between Ottawa and Washington will be felt in Medicine Hat and Redcliff, say local companies who produce or use a host of products subject to countervailing tariffs as of July 1.

The major point of the dispute involves steel and aluminum, items which show up on every single work order at Redarc Manufacturing in Brier Park and a host of oilfield an fabrication shops in the region.

Redarc owner Ryan Hazelaar says a run-up on steel prices has been occurring since the early spring, adding about 10 per cent to his costs.

“I’ve been in the steel business for 20-plus years and I’ve never seen anything like it,” he told the News on Friday.

“We used to have prices that were good for 30 days. Now that’s 48 hours. There’s nothing you can do but pass it on to the consumer.”

In his case the consumer is oilfield constructors, trucking firms and other businesses in need of fabricated steel.

General consumers will feel the pinch more directly at the till when they buy a variety of products that also appear on the final tariff list, released Friday, such as certain brands of whisky, ballpoint pens and ketchup.

Retail economists tell The Canadian Press on Friday that consumers can avoid some of the markup by altering their purchasing — a strategy that could boost sales for Canadian competitors.

Also listed are cucumbers and gerkins, which the U.S. midwest imports from Ontario for pickle production, then ships back north.

Local grower Redhat Co-op produces English cukes, not field cucumbers, and president Albert Cramer said his group is still trying to determine if there will be a discernable effect.

If the price of imports rise, then theoretically the domestic product becomes more attractive to wholesalers and customers.

Cramer said it’s still a question whether the trade row could have a positive effect on the growers’ co-operative sales.

“We don’t know too much, but I do know all this trade business is not going to help anybody in the end,” Cramer told the News on Friday.

Redhat doesn’t sell into the United States but does import some volume of produce to keep its plant operating during growing periods at local greenhouses.

Hazelaar said he doesn’t really have the ability to source Canadian-only steel, considering the intertwined nature of the industry and supplier contracts.

The entire issue dates to late May when U.S. President Donald Trump announced import tariffs of 10 to 25 per cent on certain Canadian produced aluminum and steel, claiming it was a matter of national security. That was later postponed, but Ottawa responded that without further exemption, countervailing tariffs would arrive on Canada Day.

U.S.-made steel will be charged 25 per cent more and 10 per cent on a host of other food products and consumer goods — aimed at politically sensitive regions of the U.S.

Prime Minister Justin Trudeau plans to spend part of Canada Day Festivities at Regina, where Evraz is a major steel producer and employer, as well as Leamington, Ont., home of tomato production for French’s Ketchup.

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