Canada strengthens the system of tariff quotas for steel imports

Canada is strengthening its steel import tariff quota system to mitigate the impact of US tariffs on its steel industry. The relevant measures were announced on the Canadian government’s website.

As noted, Canadian steel producers are export-oriented and therefore vulnerable to changes in international trade policy. In 2024, they exported just over 50% of their annual production, with 90% of these volumes going to the United States. Growing trade pressures and market disruptions require a clear and proactive response.

In order to help domestic producers who are suffering from US tariffs imposed in this sector, Canada will reduce the duty-free volume of steel imports into the country.

Starting 1 August 2025, imports from countries that have a free trade agreement with Canada (excluding the US and Mexico) in excess of 2024 volumes will be subject to a 50% tariff.

For countries that do not have free trade agreements with Canada, the government has reduced the duty-free quota to 50% of 2024 volumes from 100% previously in force. Imports in excess of the quota will face a 50% tariff.

A 25 per cent additional tax will also be applied to imports from all countries except the US containing steel smelted and cast in China.

«This will increase transparency in the domestic supply chains and help prevent circumvention of Canada’s trade measures. The product scope of the surtax would align with the existing China Surtax Order on steel. This measure will be implemented before the end of July,» the government said in a statement.

The government will consult with industry to finalise other elements of the tariff quota design.

The government will also provide up to $1 billion to the Strategic Innovation Fund to support the steel industry’s transition to new business areas and strengthen domestic supply chains.

In addition, the federal government will change its procurement rules. Companies that enter into contracts with the government will be required to buy steel from Canadian producers where possible.

As GMK Center reported earlier, representatives of the Canadian steel industry criticised the measures proposed in June to protect the industry from the effects of US tariffs as insufficient.