Canadian steel companies pay millions after U.S says they didn't pay proper tariffs

Two Canadian steel companies have agreed to pay $19 million to resolve allegations they knowingly failed to pay proper duties on flat-rolled steel manufactured in Europe and Asia, the U.S. Justice Department said Wednesday.

From May 2019 through January 2025, Farjess Inc. and Royal Canadian Steel Inc., along with part-owner and president Feroz Jessani, misrepresented the origin of the steel as Canadian and American, the department said in a news release.

The companies knew the steel was from China, Indonesia, Italy, Turkey or Vietnam, the department said.

A whistleblower broker flagged the two Canadian companies through a provision in the False Claims Act that allows private parties to file lawsuits on behalf of the United States for false claims.

That broker will get about $3.61 million as part of the settlement with the Canadian steel companies.

“Import duties serve an important role in protecting our national interests generally and the American steel industry in particular,” U.S. Assistant Attorney General Brett A. Shumate said in the news release.

“The Department of Justice will zealously pursue anyone who fraudulently evades the duties owed on steel products imported into this country.”

Throughout the time period the Department of Justice alleges the Canadian companies were misleading U.S. Customs and Border Protection about the duties, steel imports compliant with the Canada-U.S.-Mexico Agreement on trade were not subject to any tariffs.

U.S. President Donald Trump imposed 25 per cent tariffs on steel in February 2025 and later increased the duty to 50 per cent, including for imports compliant with the trilateral trade pact.

The news release said the settlement was record-setting.

“Our border is the front line of American industry. Approximately half of all U.S.-Canada land trade flows through our district,” said Jerome F. Gorgon Jr., U.S. attorney for the Eastern District of Michigan.

“And we will continue to protect our businesses from foreign fraudsters.”

This report by The Canadian Press was first published May 20, 2026.