Canada is preparing to adjust countervailing duties on US steel and aluminum

Canada may increase countervailing duties on U.S.-made steel and aluminum if it fails to reach a broader trade agreement with the Trump administration within a set timeframe. This is stated in the message of the government of the country.

In early June, Donald Trump doubled duties on steel and aluminum imports to the United States to 50%. Canadian industrialists called for a response to this move. Earlier, on March 13, Canada imposed 25 percent duties in response to a certain list of American steel products worth CAD 12.6 billion and aluminum worth CAD 3 billion.

Earlier this week, Canadian Prime Minister Mark Carney announced an agreement with the US President: the parties should try to conclude a new economic and security agreement by July 21.

While negotiations on a new partnership continue, Canada has announced measures to protect workers and industry.

“First, on July 21, Canada will adjust its existing countervailing duties on U.S. steel and aluminum products to a level consistent with the progress made under a broader trade agreement with the United States,” the government said in a statement.

In addition, new procurement rules will be introduced for federal projects – only Canadian manufacturers and partners that provide mutual access through trade agreements will be able to compete for them.

Canada will impose new tariff quotas of 100% of the 2024 level on steel imports from non-FTA countries to “stabilize the domestic market and prevent harmful trade diversion as a result of US actions that destabilize markets”. These quotas will be applied retroactively and will be reviewed in 30 days.

In the coming weeks, the Canadian authorities will also introduce additional tariff measures to prevent risks associated with global overcapacity and unfair trade in the steel and aluminum sectors.

The government will establish two task forces for both sectors with the participation of stakeholders. They will meet regularly to monitor market trends.

At the same time, Canadian steelmakers reacted to the announced measures.

«The plan does not meet the needs of our industry in this most difficult time. We will continue to review the details of the measures and work constructively with the federal government to develop a plan that works for Canadian steel producers and the thousands of workers who make up our sector,» the Canadian Steel Producers Association (CSPA) and the United Steelworkers Union said in a joint statement.

In late May, the CSPA issued a strong statement in response to the Trump administration’s decision to increase the duty on steel imports to the US to 50%. It emphasized that such actions could lead to serious disruptions in the closely integrated steel supply chains between the countries. This will have negative consequences for both Canadian and American companies.