Canada Imposes New Tariffs on US Steel to Restrict Imports
Canada is set to implement new tariffs on a range of steel products, including many imported from the United States. This decision comes as Prime Minister Mark Carney aims to bolster a struggling domestic industry impacted by ongoing trade tensions and an influx of inexpensive steel from China.
Details of the New Tariffs on US Steel
Effective December 26, a 25% tariff will be imposed on approximately C$10 billion (around $7.1 billion) worth of imported steel derivative products. These products include:
- Wind towers
- Prefabricated buildings
- Fasteners
- Wires
According to a Canadian government official, nearly 40% of the affected items typically come from the US. This tariff move marks the first adjustment to import taxes on US products since Carney lifted most retaliatory tariffs in September.
Context and Industry Response
A broad 25% tariff on US steel and aluminum continues to remain in place. Carney has thus far refrained from imposing a 50% tariff similar to that introduced by US President Donald Trump.
Keanin Loomis, head of the Canadian Institute of Steel Construction, expressed optimism regarding the new tariffs, stating, “This is an encouraging leap forward.” Loomis emphasized that the Prime Minister shows a stronger understanding of the industry’s needs compared to previous months.
Ongoing Trade Negotiations
Carney has maintained a conciliatory approach towards Trump, hoping for an agreement to reduce US tariffs affecting Canadian exports. However, negotiations hit a standstill when talks were canceled on October 23 due to disagreements stemming from an Ontario government anti-tariff advertisement.
While in Washington on December 5 for the 2026 World Cup draw, Carney is expected to meet Trump for the first time in nearly a month. Carney noted that recent communications with the president were not significant enough to report.
Additional Measures to Support Canadian Industries
In response to the challenges faced by the steel and softwood lumber sectors, Carney announced the following initiatives:
- Extending the deadline for companies to apply for tariff relief on imported steel until January 31.
- Lowering the tariff-rate quota for steel imports from non-trade agreement countries to 20% of last year’s levels.
- Increasing the loan program by C$500 million for businesses in the softwood lumber industry.
- Issuing incentives to Canadian railway companies to reduce shipment costs for steel and lumber.
- Allocating over C$100 million to support employees experiencing reduced hours due to decreased business activity.
Implementation of the Buy Canada Policy
Carney also plans to implement the Buy Canada policy this year. This policy mandates that all federal defense and construction contracts exceeding C$25 million prioritize Canadian sourcing, including steel and lumber.
Amidst these developments, the Canadian steel industry continues to face significant challenges, particularly due to the market ramifications of US tariffs. The government remains committed to creating a more favorable environment for Canadian steel producers and enhancing the competitiveness of domestic industries.
