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Canadian steel production isn’t even enough to be on the chart;

It doesn’t need to be. In 2017, the Chinese made about 900m tons of steel. Assuming evenly spaced production, 3Q YTD 2017 Chinese production would have been 675m tons. In 3Q YTD 2017 , we only imported about 4m* tons from the Canadians, and about 30m tons in total. In the same time period, the Canadians imported 600K tons of steel from China. So it’s possible that some of that steel was rerouted to the US. But most Canadian steel wasn’t directly imported from China.

And if you look at the list of sources of Canadian imports, only Vietnam** looks like it might have rerouted Chinese steel. But at 2% (or less) of Canadian imports, that’s only 150K tons. Add it to the Chinese number, and that’s only 750K tons out of the 4m tons Canada exported to the US. And that’s out of 30m tons of US steel imports.

Bottom line is that rerouted Chinese exports are unlikely to be the source of the problem. The real problem is Chinese dumping in a global market where steel basically has a single price adjusted for quality and transportation costs. It’s the same reason that a domestic oil glut hurts the Russians, even though they sell to completely different customers. No rerouting required there either.

There’s nothing wrong with protecting our steel industries, but it’s not primarily Chinese steel producers we’re hurting. Even with the tariff, the domestic price will be determined by the global price, with a 25% surcharge tacked on.

https://www.trade.gov/steel/countries/pdfs/imports-Canada.pdf

* My post about Canadian imports from China had a typo. It was 600,000 tons, not 600m tons.

** Even Vietnam now looks like a dubious source for rerouted imports because a $15b Taiwanese steel plant a decade in the making just came online.
https://en.wikipedia.org/wiki/Formosa_Ha_Tinh_Steel

My view is increasingly that if we want to punish China for protectionism, we should punish China. Put a 10% tariff on Chinese goods. On $500b of exports to the US, that’s $50b in tariff revenues (probably less, since imports will fall somewhat). They could go through a bunch of rerouting gymnastics, or they could just crack open their markets a bit more.

The point is that this steel-related tariff is just head-scratching if the target is China, and mostly hurts our allies. Canada is a natural steel producer. It produces the same amount of iron ore as the US, but only has 10% the population. Mexico’s not far behind in iron ore production. And we’re the Saudi Arabia of coking coal, and no slouch in iron ore production either.