Canada warned that it could increase counter-tariffs on steel and aluminum imports from the United States if a broader trade agreement with the U.S. is not reached within 30 days. Prime Minister Mark Carney said the deadline for progress is July 21.
Earlier this month, U.S. President Donald Trump raised import duties on steel and aluminum from 25% to 50%. This move has raised concerns in Canada, which is the largest supplier of these metals to the U.S. Trump’s tariff hike has prompted calls for Canada to respond officially.
Carney said he and Trump agreed to aim for a new economic and security deal by July 21. Until then, Canada will not immediately match the U.S. tariff increase. Instead, Canada will adjust its existing counter-tariffs on U.S. steel and aluminum based on the progress of trade talks.
In March, Canada imposed 25% retaliatory tariffs on U.S. steel products worth C$12.6 billion and aluminum products worth C$3 billion. On Thursday, Canada also announced new procurement rules. These rules allow Canadian producers and trading partners with tariff-free access to compete for federal contracts involving steel and aluminum.
To protect its domestic market, Canada will set new tariff-rate quotas equal to 100% of 2024 import levels for steel products from countries without free trade agreements. This aims to prevent harmful trade diversion.
Canada exports over 90% of its steel and aluminum to the U.S. It also buys about 20% of U.S. steel exports and 50% of U.S. aluminum exports, according to the Royal Bank of Canada. The metals trade is vital for both nations.
Carney highlighted Canada’s plans to invest in infrastructure projects, including defense, oil and gas pipelines, and housing. These projects will require large amounts of steel and aluminum. He emphasized the government’s commitment to supporting the industry by prioritizing Canadian steel and aluminum for federal projects.
Additionally, Canada will promote the use of Canadian metals in Canadian-made products. The government will create a task force to monitor changes in the steel and aluminum markets under the current tariff system.
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