Canada: Trade Remedies In The Age Of Trump: Impact On Canadian Businesses

Last Updated: June 22 2017
Article by Darrel Pearson and Jessica B. Horwitz

The election of U.S. President Donald Trump has heralded a new protectionist era of international trade. Since Trump's inauguration, the U.S. has withdrawn from the Trans-Pacific Partnership agreement, initiated discussions regarding NAFTA renegotiation, issued executive orders to ratchet up collection of customs duties and enforcement of trade remedy actions, and has begun examining strategies to ignore unfavourable WTO rulings. Far from being an outlier, this "My Country First" stance is increasingly reflected in markets around the world.

Canadian manufacturers and exporters are expected to take their cue to, respectively, protect their own interests and brace for increased use of protectionist measures by key trading partners. Canadian businesses that rely on imports should expect to experience an increase in Canadian government protectionist actions based on claims of diversion of imports otherwise destined for other protected markets such as the U.S., as well as general growing isolationism. It is important to be aware of the risks of increased trade actions and develop strategies to mitigate risk.

What Are Trade Remedies?

Trade remedies take the form of anti-dumping duties, countervailing duties, or safeguard measures, and are exceptions to the general rules limiting tariff and non-tariff trade barriers established under the various World Trade Organization (WTO) agreements. They are mechanisms by which countries may protect domestic industries against injury caused, or threatened to be caused, by unfairly traded imports. Trade remedies are therefore inherently anti-competitive in nature, and are being increasingly used both by developed and developing countries. Although the principle behind trade remedies is to level the playing field, trade remedy proceedings are statutorily designed to favour domestic interests. Trade remedies can also be used strategically by countries as a form of "tit-for-tat" in response to protectionist actions by trading partners.

Anti-dumping duties protect against "dumping", which is the export sale of goods into the Canadian market at prices that are lower than the normal value of those goods in their home market (measured as either sales prices to unrelated domestic purchasers, or constructed prices based on fully absorbed cost of production plus an amount for profit). Countervailing duties eliminate the impact of certain types of foreign government subsidies that cause prices of exports to be artificially low. Finally, safeguards, whether in the form of duties, quotas, permit requirements, a surtax or some combination thereof, are short-term measures that shield against the impact of an irregular surge in import volumes.

Under the WTO Anti-Dumping Agreement (Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994), Agreement on Subsidies and Countervailing Measures, and the Agreement on Safeguards, trade remedies may only be imposed by a member state if it conducts an investigation to determine that: (i) dumping, subsidization, or surge of imports has occurred and (ii) the unfair trade practice has caused injury to a domestic industry. In Canada, anti-dumping and countervailing are bifurcated proceedings conducted by the Canada Border Services Agency (dumping/subsidization determinations) and the Canadian International Trade Tribunal (CITT) (injury/causation determinations). Safeguard inquiries are conducted by the CITT with input from the Minister of Finance and/or Global Affairs Canada. These concepts and proceedings are esoteric and specialized and warrant retaining expert legal counsel.

"My Country First"

The anti-trade rhetoric of the Trump administration, as well as other recent nationalist developments such as "Brexit", is not unprecedented. Protectionism historically tends to rise in periods of financial downturn and therefore resort to trade remedy actions tends to be cyclical. Such was the case in the 1930s with the U.S. Smoot-Hawley Tariff Act, and the wave of government interventions in commerce the form of subsidies and "voluntary export restraints" during the oil and gold shocks of the 1970s and 80s. Slowed economies of the early 1980s and 1990s witnessed particular upticks in trade remedy cases. The 2008 financial crisis caused many states to once again look inward; based on 2016 statistics from the WTO, in 2016 the G20 economies were introducing new protectionist trade measures at the fastest pace seen in nearly a decade, rolling out the equivalent of five each week. The increase in cases coincident with the improved economies experienced today have more to do with protectionism and "my country first" than weakened economies.

U.S. Trade Representative Robert Lighthizer and Department of Commerce Secretary Wilbur Ross have both taken a hard-line stance on trade and have expressed commitments to engage in a greater number of trade enforcement actions, including self-initiation by the U.S. government of trade remedy actions. (Cases are normally brought to the attention of governments by domestic industries, but this is costly as compared to cases where the government undertakes the studies of pricing and competition required to underpin complaints of unfair trade practices.) Funding has been earmarked in the Trump administration budget to hire additional staff for this purpose and to increase enforcement of existing and future cases. The President has also issued executive orders aimed at increasing collection and enforcement of U.S. trade remedy duties, examining the impact of trade deficits on the U.S. economy, and assessing whether imports of steel and aluminum products pose a threat to U.S. national security, among others. The United States has also withdrawn from the Trans-Pacific Partnership treaty and re-opened NAFTA renegotiations. All signs point to a likely increase in unilateral actions by the U.S. that could harm Canada's interests, and which could in turn inspire a domino effect of reflexive protectionist actions by Canada and other countries to compensate.

How Can Trade Remedies Affect My Business?

Historically, trade remedies only affect about 1 to 2 percent of Canadian imports at any given time. But trade remedies have a disproportionately large and disruptive effect on the industries involved. Moreover, in recent years the complexity and financial impact of trade remedy cases has been increasing. Most free trade agreements do not eliminate trade remedies (the Canada-Chile Free Trade Agreement being an outlier), and indeed may increase their use. In the absence of tariffs, trade remedies are a last line of defence to protect domestic industries against foreign competition.

For importers, trade remedies have a significant impact on costs and sourcing of inputs and merchandise, and can violently disrupt supply chains. On the export side, if trade remedies are imposed by the government of a foreign country into which Canadian exporters sell, these exporters can find themselves suddenly cut off from customers in that market if assigned, as is more often the case than not, high duties. Finally, for domestic producers and manufacturers, trade remedies can provide a much-needed reprieve from foreign competition that is genuinely unfair, and can encourage the growth and development of domestic industries.

Strategies to Manage Risk

Importers and exporters, particularly those in high-risk sectors such as industrial and construction goods, should develop contingency plans to lessen the potential impact of unfavourable trade remedy actions. This should include diversifying procurement sources and/or export markets.

Businesses should also exercise caution to ensure that their trading practices are not causing injury that could trigger a trade remedy action. Canadian and foreign exporters should examine their pricing behaviours to ensure they are not selling below cost or at prices below those offered in the domestic market. Both importers and exporters should also carefully monitor market conditions in their industries, and be aware of their respective market shares and import volumes and the impact that those imports might be having on producers in the domestic industry. The cumulative effect of all imports should be considered. Although risk of being caught up by a trade remedy complaint is greater for market leaders, the cumulation principle means that even smaller players could be drawn into a proceeding even if their own sales/imports did not alone cause injury.

Finally, businesses should examine their contract terms with international suppliers and, where possible, negotiate terms that help insulate the company from the impact of trade remedies. Such terms are possible both for importers/resellers as well as end users. If there is an intermediate importer in the transaction, contracts should be reviewed to consider the "importer in reality" issue – duty liability accrues to the importer "in reality", and the importer in reality cannot be reimbursed by their upstream supply chain.

As an additional note, the flip side of a climate of heightened protectionist sentiment is that enforcement authorities will likely have a sympathetic ear to complaints by domestic producers. Businesses that produce goods in Canada and that are subject to foreign competition should assess whether there are any protections available under Canada's trade remedy system that could be used to their advantage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Darrel Pearson
Jessica B. Horwitz
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions