Canada has imposed new tariffs on US steel imports.
Canada is implementing new tariffs on a range of steel products, including many originating from the United States, as Prime Minister Mark Carney seeks to bolster domestic steel production and address the economic challenges stemming from ongoing trade tensions and a significant influx of low-priced Chinese steel. The announcement, made on Wednesday, involves a 25% tariff on approximately C$10 billion ($7.1 billion) in imported steel derivative products, with the implementation scheduled to begin on December 26th. The affected products encompass items such as wind towers, prefabricated buildings, fasteners, and wires.
The tariff marks a significant shift in Canada’s trade strategy, representing the first time since September that the Prime Minister has added new import taxes targeting US products. While a broader 25% tariff on US steel and aluminum remains in place, Carney has resisted pressure to match President Donald Trump’s 50% levy on those metals. The decision underlines a growing determination to insulate Canadian steel producers from the adverse effects of prolonged trade disputes.
A key component of the strategy involves extending the timeline for companies to apply for tariff relief on steel imports used in manufacturing, food packaging, and agricultural applications. After January 31st, firms will no longer be able to seek “tariff remission” for these uses. This extension provides a critical window for businesses dependent on imported steel to adapt and mitigate the impact of the tariffs.
During a news conference, Prime Minister Carney stated that the measures were not intended as a direct pressure tactic against the Trump administration. “It’s not targeted at the US,” he clarified. “It’s a global approach, which is creating some space for Canadian steel producers to fill it.” The Prime Minister confirmed plans to travel to Washington D.C. on December 5th to attend the 2026 World Cup draw, an event that will bring him into close proximity with President Trump for the first time in several months. A brief exchange between the two leaders was reported, though described as “not newsworthy.”
Trade negotiations with the United States remain stalled, though Canada stands “ready to re-engage,” according to Carney. The government is also adjusting tariff-rate quota levels for steel imports from nations without trade agreements with Canada. Tariffs will now apply when shipments from these countries reach 20% of last year’s levels, down from the previous 50%. Conversely, tariffs will be applied when shipments from countries with trade agreements – such as South Korea – reach 75% of 2024 levels, up from the previously defined 100%. This distinction does not apply to the US and Mexico.
Beyond tariff adjustments, the Canadian government is introducing several support measures for affected industries. A C$500 million loan program administered by the Business Development Bank of Canada will be extended to companies in the softwood lumber business, alongside a C$500 million facility for large enterprises. Furthermore, Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. will be provided with funds to offer a 50% discount on shipments of steel and lumber within Canada. Recognizing the need to support workers during this transition, the government plans to top up a program that provides benefits to employees who agree to reduced working hours, aimed at assisting up to 26,000 workers across various sectors over the next two years.
Finally, the Prime Minister pledged to implement the government’s “Buy Canada” policy, which will require that all defense and construction contracts exceeding C$25 million prioritize Canadian materials, including steel and lumber, and will extend its application to federal grants and contribution programs. A task force will also be established to examine the long-term competitiveness of the forest industry. Canadian steel companies, particularly those exporting to the U.S. market, have been significantly impacted by President Trump’s 50% tariff and the Ontario government recently extended an emergency loan to Algoma Steel Group Inc., a Canadian producer highly exposed to these challenges.
The Canadian steel industry group has been advocating for a more robust tariff wall to prevent foreign steel producers without access to the U.S. market from flooding the Canadian market. With Bloomberg reporting support from industry voices, the Canadian government’s actions represent a calculated maneuver to safeguard domestic steel production and address the ongoing economic pressures caused by global trade disputes.
