China is the source of all the problems in the global steel industry. More than half of the steel production capacity is in China.
It's true that China consumes a lot of steel, but its consumption is decreasing without it adjusting its production accordingly. It continues to build steel mills and even invest in industrial capabilities in some neighbouring countries. As a result, it continues to produce at a level above demand and floods all global markets with its surplus steel.
Groups of countries like the European Union are trying to protect themselves from Chinese dumping. Right now, we're dealing with a trade remedy system that is completely inundated with Chinese products. It's not just steel, by the way, because there are other products.
We're also seeing that China is becoming increasingly sophisticated in its industrial approach. This is the case not only for primary steel, but also for by-products or products containing steel.
It comes as no surprise to many that a large number of our industry's customers in Canada no longer exist. Take mattress manufacturers, for example, whose products used to contain steel. Now, instead of exporting raw steel, the Chinese simply ship products containing steel.
As a result, there is a multiplier effect in other sectors. Moreover, if the U.S. steel tariff measures also have a huge impact on derivative products, it is partly because of their added value. The repercussions are being felt here at home as well.