Business

Trump makes Buy America rules more restrictive, demanding 75% U.S. components

U.S. policies which act as a barrier to Canadian businesses bidding on government projects are about to get more stringent.

In new blow for Canadian steel, 95% of steel in roads, bridges must be from U.S.

U.S. President Donald Trump speaks during a Made in America showcase at the White House on Monday. (Andrew Harnik/Associated Press)

U.S. policies which act as a barrier to Canadian businesses bidding on government projects are about to get more stringent.

U.S. President Donald Trump signed an executive order Monday demanding that 75 per cent of the value of any components in "Made in America" products must to be sourced in the U.S. That's an increase from 50 per cent previously.

And, in a fresh blow to Canada's steel industry, he has demanded that 95 per cent of steel and iron used in any public contract must be from the U.S.

Tariffs of 25 per cent on Canadian steel and 10 per cent on Canadian aluminum exported to the U.S. were lifted in May, months after a new NAFTA deal was signed.

Canadian companies are already restricted in bidding on road, bridge and other public projects from the U.S. government or any state with Buy America restrictions.

The new rules limiting public projects to using 95 per cent U.S. steel will further limit opportunities to win business.

Catherine Cobden, president of the Canadian Steel Producers Association, said association members were disappointed with the new restrictions.

"The existing Buy America provisions are already having a negative impact on Canada's steel industry," she said via email.

"Today's announcement to require 95 per cent U.S.-made steel further adds to these challenges and fails to recognize the integrated nature of our North American economy. These types of trade barriers do not have a place between two nations that have a relationship founded on fair and free trade."

The president signed the order during an annual White House "Made in America" showcase. Manufacturers from all 50 states were represented.

Trump says the administration is "heeding the wisdom" of the nation's founders by "restoring our economic independence and reawakening our industrial might."

Canada's premiers have called on Prime Minister Justin Trudeau to gain an exemption from Buy America provisions.

"Today's news out of Washington is deeply concerning. The move to increase these provisions is another blow to Ontario and Canadian manufacturing," Ontario Premier Doug Ford said in an email statement.

Ford has been concerned about Buy America in part because of Bombardier, which said it had to lay off 500 employees in its Thunder Bay, Ont., plant because Buy America policies restricted where it could make rail cars.

"That's why I raised this issue with my fellow premiers in Saskatchewan last week. They all shared my concern about the impact of Buy America and agreed that the federal government must do more to protect Canadian jobs," Ford said. 

With files from the Associated Press

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