Thank you for allowing me the opportunity to contribute to your study. It's an important one at a critical time in this industry for steelmakers, steel users and steel buyers.
I am responsible for institutional relations at Tenaris. I've worked at the company since the very beginning in Canada, almost 20 years now. Beyond Tenaris, I have responsibilities as vice-chair of the Canadian Manufacturers and Exporters. I'm on the board of the Petroleum Services Association of Canada and chair of the Canadian Steel Producers Association's trade and public policy committee.
I'd like to give you some context about our company. We are one of the top steel companies in the world by market capitalization, and we're also one of the top oil field service companies in the world. We're a leader in steel pipe manufacturing and oil field services for energy development.
Energy development in Canada is an important market. We're the fourth-largest market in the world, and we're now the largest open market in the world. This isn't a market where foreign competitors are just going to send a little bit here or there. This is the next largest available market after the United States, so we're particularly vulnerable.
The products we manufacture are used for oil and gas extraction—this is casing and tubing—also line pipe that transports hydrocarbons from the well to processing facilities, and inside processing facilities like refineries, power generation and, very topical this week, LNG terminals.
Tenaris has three manufacturing facilities in Canada, and nine service locations.
Trade policy is one of the most important drivers of investment. I'd like to specifically address three critical issues.
We fully support the USMCA, and the combined efforts from all parties to obtain a solution, and support the ongoing work to obtain a full exclusion from the section 232 tariffs. Steel now remains the only outstanding issue in getting NAFTA back and working effectively as USMCA.
I'd like to discuss the safeguard investigation that is critical, with or without a section 232 resolution for Canada in the United States. I want to dispel some myths about a safeguard—that it is a remedy. It is a stabilizer. It's not an act of protectionism. We will grow to serve Canada's needs as market opportunities present themselves.
First is the USMCA. Thank you to all the parties that worked on this. This should allow the USMCA countries to now work together to tackle the most important issue in the steel industry today, and that is global overcapacity. We need to work on this. Governments have been coming together in all forms discussing it, but still with no tangible action.
We are in a very vulnerable position at this time. Chinese steel has an overcapacity of over 400 million metric tons, which is almost 30 times the size of the Canadian market. It also has an overcapacity in products made of steel, like the high value-added products used for energy development that we manufacture here in Canada.
To complete the work and truly align North America to take on the world, the last remaining aspect to address is finding a fair solution to the section 232 tariffs being applied to Canada. This should be one of the Canadian government's most important priorities.
We support the objective of demonstrating that a complete exclusion for Canada is deserving; however, inside the side letters on the USMCA may be a possible path to solution. The potential section 232 on autos, where 2.6 million units of cars are committed to versus the amount today, might provide a solution. I believe it's about a 40% potential growth opportunity; however, this is something that should be addressed. We as a leader in the steel industry are open to discuss with the Canadian government what strategies may or may not work for Canadian employees in this industry and the communities where we operate.
The devil is in the details, and we're here to help.