Canadian Government Signals Possible Tariff Adjustment on U.S. Steel and Aluminum to Safeguard Domestic Industry

On June 20 (local time), the Canadian government announced it may revise its counter-tariffs on U.S. steel and aluminum imports by July 21, contingent on the outcome of ongoing trade discussions with the Trump administration. This potential adjustment reflects concerns over the impact of U.S. tariff policies and aims to safeguard domestic industry.

At present, the United States applies a 50% tariff on imported steel and aluminum, while Canada imposes a 25% retaliatory duty on equivalent goods manufactured in the U.S. Both sides are engaged in broader trade negotiations, with a tentative mid-July deadline.

Prime Minister Mark Carney stated that changes to the tariffs—either increases or reductions—will be guided by progress in the talks with President Trump. “We will of course continue these negotiations in good faith… Meanwhile, we must strengthen domestic capabilities and protect Canadian workers and businesses from the unfair tariffs currently imposed by the United States,” Carney remarked.

In parallel, the Canadian government introduced new procurement rules for federal projects, limiting the sourcing of steel and aluminum to domestic producers or nations with reciprocal trade access under existing agreements.

Following the announcement, shares of Algoma Steel Group Inc. rose by up to 7.9%, reaching their highest intraday level since March 5 before later retracing some gains. The Canadian Steel Producers Association and the United Steelworkers Union issued a joint statement pledging to assess the policy details and continue working with Ottawa on an approach tailored to domestic producers.

Officials also warned that the 50% tariff imposed by the Trump administration could trigger a redirection of global steel and aluminum shipments into Canada. To address this, authorities are preparing new quota measures to restrict imports from nations without trade agreements and plan to roll out further safeguards in the coming weeks to prevent dumping.

Prime Minister Carney also highlighted progress on a CA$10 billion federal loan facility designed to support large Canadian firms facing liquidity constraints in the traditional credit market. Carney confirmed he has held “relatively frequent” communications with President Trump. Minister LeBlanc noted that he has engaged with U.S. Secretary of Commerce Howard Lutnick and is scheduled to meet with U.S. Trade Representative Jamison Greer on Friday. When questioned on Canada’s position regarding possible acceptance of limited U.S. tariffs in a final deal, Carney responded that genuine free trade would best serve both countries’ long-term interests.