Canadian manufacturers face new Buy American policy on construction materials

The head of Canadian Manufacturers and Exporters says Canada will have to work hard to secure carve-outs and waivers to protect access to the U.S. market.

Canadian manufacturers are once again facing the risk of being hit by U.S. protectionism and the need to fight for crucial exemptions.The challenge comes after the Biden administration announced new procurement guidance Monday that requires the construction material purchased for federally-funded infrastructure projects to be produced in the U.S.

Dennis Darby, head of Canadian Manufacturers and Exporters, says Canada will have to work hard to secure carve-outs and waivers to protect access to the U.S. market, as it has done in previous challenges.

Key to those efforts will be emphasizing the integrated nature of the economies, where materials already flow freely across the border, and how Canada is rarely in a position to undercut U.S. prices.

Darby says the U.S. provisions are likely intended to be more targeted toward countries like China, where there are concerns about subsidized production and the exporting of products at low prices.

The Buy American rules, part of the US$1-trillion infrastructure package that was passed into law last November, allows for several scenarios in which the requirements could be waived, including if they’re inconsistent with public interest or if the materials aren’t produced in sufficient quantities or quality domestically.