Canada to Curb Steel Imports to Soften Blow From US Tariffs
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Canada will reduce the amount of foreign steel importers can bring into the country tariff-free, a move to help domestic producers suffering from President Donald Trump’s levies on the sector.
The government will tighten “tariff rate quota” levels for steel products made in countries that don’t have a free trade agreement with Canada. Producers from those nations will be able to ship half of last year’s volumes — above that level, a 50% tariff will apply.
Steel-producing countries that have existing trade deals with Canada, such as South Korea, will have more flexibility. They’ll be allowed to ship steel up to 2024 levels before tariffs kick in.
But there won’t be any change right now to tariffs on U.S. steel, Prime Minister Mark Carney said July 16. His government is trying to strike a trade deal with the Trump administration ahead of an Aug. 1 deadline.
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“The current trade situation with the United States, and unfair trade practices from other countries — that combination guts our steel industry,” Carney said at a press conference at a steel manufacturing plant in Hamilton, Ontario. “For Canada to build big things again, we need our steel industry to advance, not retreat.”
Canada’s steel producers have warned of dramatic job cuts after Trump hiked import taxes on foreign steel and aluminum to 50%. Already, the industry says it has significantly reduced shipments and faced close to 1,000 job losses.
READ MORE:Canada Faces Steel Job Cuts as US Tariff Pressure Mounts
Canada has so far decided not to match those tariffs, keeping its retaliatory tariffs at 25%.
Carney said the U.S. trade deals with other countries are going to include “very high tariffs” and that may push steel products into Canada’s comparatively open market. “It’s important that we protect our market from those secondary effects,” he said.
Canada has taken other measures to aid steel producers. The federal government will change its procurement rules to require companies that have contracts with the federal government to buy steel from Canadian producers.
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On July 16, the government also laid out efforts to help workers that have faced job cuts since tariffs were imposed. Canada will deploy C$70 million ($51 million) to provide training and income support for as many as 10,000 affected steelworkers. It’s also providing C$1 billion to a fund designed to help steel firms advance new projects.
“We have the potential to become our own best customer for steel, but we will lose that ability if we don’t manage the profound transformation now underway in the industry,” said Carney.
