Canada announces additional protective measures to support steel producers

Canadian Prime Minister Mark Carney announced new measures to support steel producers amid trade tensions and US tariffs.

Canada will limit steel imports from countries that do not have a free trade agreement (FTA) with it from 50% to 20% of 2024 levels. At the same time, volumes exceeding the quota will continue to be taxed at an additional rate of 50%.

Quotas for FTA partners will be reduced from 100% to 75% of the 2024 level, and volumes exceeding them will also continue to be subject to an additional rate of 50%. Canada will continue to adhere to the current CUSMA (USMCA) agreement exemption. Therefore, the US and Mexico will continue to be exempt from this requirement.

In addition, from December 26 of this year, a 25% tariff will be applied to the full cost of steel derivatives from all countries; the list of goods is attached. For example, this includes certain types of non-alloy steel, fasteners (nails and screws), structures (prefabricated buildings, wind towers), etc. A more complete list will also be published, which may be updated periodically to reflect changes in market conditions.

The initial list is expected to cover imports of steel derivatives worth more than CAD 10 billion, referring to products that have analogues in the country.

According to Bloomberg, about 40% of the goods on the list are usually imported from the US. The broad 25% tariff on American steel and aluminum remains in effect – the prime minister did not respond to calls to raise it to 50%.

Carney also said he would extend the deadline for companies to apply for exemptions from tariffs on steel imported from the US for use in manufacturing, food packaging, and agriculture. Businesses will no longer be able to apply for such exemptions after January 31 next year.

At a press conference, the Canadian prime minister said that these steps were not intended to put pressure on the Trump administration. According to him, they represent a global approach that creates some breathing room for Canadian steel producers.

In October of this year, Canada exempted certain American steel and aluminum products from tariffs, mainly those related to healthcare, national security, manufacturing, agriculture, and food packaging. As explained, this refers to a group of very specific goods that must be imported into Canada to support supply chains.