The mayors of two North Texas cities are siding with Canadian officials over the potentially negative impact a “Buy American” iron and steel measure could have on Texas-Canada trade relations.
Both Dallas Mayor Mike Rawlings and Fort Worth Mayor Betsy Price, who are on a trade mission to Toronto and Montreal this week, said they had concerns with a law that will require large state projects — such as buildings, roads and bridges — to purchase iron and steel from an American supplier if the cost doesn’t exceed 20 percent more than the price of cheaper, foreign imports.
The measure was signed by Gov. Greg Abbott Friday and goes into effect Sept. 1.
The law has grabbed the attention of several Canadian officials, who wrote in a May 15 letter to Texas senators that they were “deeply concerned” with how the law would impact Texas-Canada trade. They asked members of a legislative conference committee to tack on an amendment that would exempt Canadian steel, but their request was denied.
"I didn’t like that [law],” Rawlings said in an interview on BNN, Canada's Business News Network. “I think it was pointed at China, but it has some repercussions here in Canada, and we need to go back and talk to [Abbott] about that.”
In a statement to The Texas Tribune on Wednesday, Price said she was concerned with some of the unintended consequences the measure could have on "our positive Texas-Canada trade relationship" and planned to work with lawmakers to "explore potential changes to this law."
"It is critical we support our strong trade relationship with Canada, while also promoting efforts to support the American marketplace and American jobs,” she said.
Senate Bill 1289 by state Sen. Brandon Creighton, R-Conroe, expands a provision already in effect for the Texas Department of Transportation and the Texas Water Development Board. The law also says that if American suppliers aren't prepared to supply a project or if there is a compelling state interest, any country's iron and steel can be used.
According to Canadian officials, Canada is the top export destination for U.S. steel products, representing roughly $9.7 billion in trade last year. Ontario Premier Kathleen Wynne said in a written statement that she had met with both Texas mayors on Monday and was hoping to work with Texas lawmakers to seek an exemption for the province.
“The strong relationship between Ontario and Texas is long-standing and vital to the economies of both regions,” she wrote. “We are disappointed that Texas has passed discriminatory Buy American provisions.”
Creighton has previously said that the aim of his bill was not to penalize Canada but to ensure "foreign governments like China and Turkey can’t create a foreign steel market that would gut the American market."
“We stand firm for Texas jobs and manufacturers and against communist China flooding the market to hurt those stakeholders,” he said.