Ottawa (Rajeev Sharma): In a bold move to protect Canada’s domestic steel sector from global trade disruptions and unfair pricing practices, Prime Minister Mark Carney on Wednesday announced a sweeping series of tariffs and trade safeguards, signaling a more aggressive stance on imports.
The centrepiece of the new strategy is a tariff rate quota targeting countries with which Canada has free trade agreements, excluding the United States. Imports from these countries that exceed 2024 volume levels will be hit with a 50% tariff, a measure designed to deter trade diversion and stabilize domestic production.
In addition, steel imports containing material melted and poured in China, regardless of the exporting country, will face an additional 25% tariff if entering Canada after July. This measure is a direct response to growing concerns that Chinese steel, already restricted in the U.S., is being redirected to Canadian markets, undercutting domestic prices and harming local producers.
“These measures will ensure Canadian steel producers are more competitive by protecting them against trade diversion resulting from a fast-changing global environment for steel,” Carney said during the announcement.
U.S. Exempt, but Global Crackdown Underway
The policy notably exempts Canada’s United States-Mexico-Canada Agreement (USMCA) partners from the new quota-based tariffs. However, Canada will honour only existing trade volumes, meaning no additional preferential access will be extended beyond current levels.
For nations without a free trade agreement with Canada, the tariff-free quota has been slashed by half, from 100% of 2024 volumes to just 50%, with imports exceeding that threshold also incurring a 50% tariff.
The decision follows an earlier move by U.S. President Donald Trump, who doubled U.S. tariffs on steel and aluminum to 50% this month, citing national security concerns. Canada, which is the largest steel exporter to the U.S., now appears to be adopting a similar protectionist posture.
Domestic Industry Reacts
The Canadian steel industry, long vocal about being undercut by cheap and redirected imports, welcomed the announcement but emphasized the urgency of implementation.
“This is something we should have been doing all along, but it’s fantastic to see that we are making progress,” said Catherine Cobden, President and CEO of the Canadian Steel Producers Association, in an interview with CBC.
To support domestic growth, Carney also introduced a $1 billion Canadian fund (approx. $730 million USD) aimed at bolstering steel sector innovation, particularly in critical sectors like defence and infrastructure. In a further boost, Canadian steel producers will now be prioritized in federal procurement contracts.
In a related development, steel manufacturer Evraz has filed a formal complaint against imports from Mexico, the Philippines, South Korea, Turkey, and the United States, alleging unfair pricing of oil country tubular goods (OCTG).
Global Implications
Canada’s new measures are expected to create ripples in global trade circles, potentially inviting scrutiny from affected countries and possibly legal challenges under World Trade Organization (WTO) rules.
With geopolitical tensions, supply chain disruptions, and growing trade protectionism reshaping the global steel market, Carney’s announcement marks a significant shift in Canada’s economic policy — one aimed at shielding its critical industries from the volatility of global competition.
As the measures roll out, industry players and international observers alike will be watching closely to see whether they succeed in restoring stability to Canada’s steel sector — or spark retaliatory action from Canada’s trade partners.
Ask ChatGPT
