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Quebec responds to tariffs with metals subsidies

12 Jun 2018 23:11 (+01:00 GMT)
Quebec responds to tariffs with metals subsidies

Houston, 12 June (Argus) — The Quebec government initiated a support program for steel and aluminum companies harmed by US tariffs.

Quebec will "set aside" C$100mn in a guaranteed loan fund for "smaller" steel and aluminum companies, according to state broadcaster Canadian Broadcasting Corporation (CBC).

The funds are intended to "support the working capital of eligible businesses so that they can continue their export activities. This measure, which takes effect today, does not exclude adjustments to the adverse effects that may emerge in the coming weeks," the Quebec Ministry of Economy said.

The program is open to manufacturing companies with eligible expenditures of C$100,000 or more or investment projects with eligible expenditures of C$250,000 or more.

The loans are a first step in addressing the effects of the tariffs, said Quebec economy minister Dominique Anglade. A second working session will meet next week to monitor developments "and the harmful effects of the tariffs on the Quebec steel and aluminum industries."

The loan fund is a response to tariffs announced by the Trump administration on 31 May. Beginning on 1 June, Canadian steel and aluminum imports to the US face tariffs of 25pc and 10pc, respectively.

Canada has announced that it will impose a reciprocal tariff on steel imported from the US effective 1 July.

Quebec is a major producer and exporter of aluminum, with nine primary aluminum smelters. The province supplies the US with about half of its imported primary aluminum.

Quebec also has four steel mills, accounting for about 16pc of total Canadian capacity. Canada produced 13.6mn t of steel in 2017, according to the World Steel Association. Canada exported approximately 42pc of its 2017 steel production, or 5.7mn t, to the US, according to the US Commerce Department.