All right. I'm going to consolidate, then.
The steel we purchase comes from the United States. It's in a hot roll form. It is then transformed by our steel tube suppliers. We have one supplier that does this in the United States, and one supplier that does this in Canada. Both of them source the material in the U.S., because they're able to hold tolerances specific to our products that are not normal in the industry. They run specific batches for us and transform.
We've worked with the tube suppliers developing product for over 12 years. Again, that is not globally common. It's very specific to our products and process. We then import the material into Canada. It's subject to the higher cost of raw materials in the U.S. and Canada that we are seeing, because of the U.S. tariffs and the duty we pay to Canada.
So far this year, we've paid $800,000 in duties to Canada for the importation of these products. We have submitted duty drawback claims for this, and those are in process now. It's a large impact to our business. Annualized at a normal production rate, this would have a $12 million-per-year impact on us in duties.
We've seen our demand for products go down since July of this year, caused by both the raw material cost increases for the materials we buy in the U.S. and the increase in costs we have based on the tariffs we have to pass to our customers. As a result, we started three-shift production this year, which was an increase of one shift from last year. We started with the view that in 2018 we would have a 20% increase in sales volume. Once we saw these tariffs, we reduced our outlook to a one-shift production level, with potentially many weeks of idling our manufacturing plant.
It's very significant to us. The panel that spoke before talked about the flow of material coming from the U.S. and the stockpile of raw material. We are also burning through that level of material, and as we begin next year, we are unclear on the impact of tariffs, and our customers' ability to accept these cost pressures.
We've reviewed the most recent provisional safeguard measures, which will be in effect on October 25. We reviewed the materials that were identified in this process, and it appears that 94% of the tariffed material coming into Canada would be removed or we could possibly avoid the tariff. A remaining 6% of items that are currently under tariff were not listed on that safeguard measure attachment. The remaining impact to us would be about $720,000 a year. It still has some impact on us.
The most important point to leave you with is that our competitors, who also produce similar product in the world market, don't manufacture in Canada. They manufacture on other continents, and they purchase raw materials from other continents, either Europe, Asia or Latin America. When they do that, they're purchasing raw materials at a lower cost than the North American level, and they are also not subject to tariffs when they import those products into Canada or when they sell globally, where we also compete.
We are at a competitive disadvantage. We're trying to understand how long these tariff impacts will last, and we're making our decisions on where we invest, and where we recapitalize our business. Thank you.