Prime Minister Mark Carney of Canada announced measures on Wednesday aimed at preventing steel imports from China and other countries affected by U.S. tariffs from flooding the Canadian market.
Mr. Carney stated, “The trade actions of the United States are further transforming global steel market dynamics and supply chains,” highlighting Canada’s vulnerability to these changes.
The imposition of a 50 percent tariff on steel by President Trump has caused significant disruption in global markets, including Canada, where the steel industry plays a crucial role.
According to Mr. Carney’s government, the U.S. tariffs have prompted China to seek increased steel exports to Canada, with many nations, including Canada, asserting that Chinese steel is sold at prices significantly lower than production costs.
Last month, Mr. Carney indicated that countries without a free-trade agreement with Canada, such as China, would face a 50 percent tariff if their steel shipments exceeded 2024 levels.
However, Canadian steel officials expressed concerns that this measure would not sufficiently protect the domestic industry from a potential influx of foreign steel.
In response, Mr. Carney announced on Wednesday that countries lacking free-trade agreements would incur 50 percent tariffs if their steel exports exceeded half of their 2024 shipment levels.
Steel producers from countries with free-trade agreements with Canada would be limited to last year’s shipment levels, with any excess facing a 50 percent tariff. Canada has already imposed a 50 percent tariff on steel imported from the United States.
Catherine Cobden, president of the Canadian Steel Producers Association, described the announcement as “a big step forward.”
Mr. Carney made the announcement at a steel plant in Hamilton, Ontario, acknowledging that he may not achieve his goal of eliminating U.S. tariffs through negotiations. He refrained from specifying what levels of U.S. tariffs Canada might accept, stating, “It would be a bad response in the middle of a negotiation.”
In addition to steel, President Trump has also placed a 50 percent duty on aluminum, with Canada being the largest exporter of both steel and aluminum to the United States.
Last week, Mr. Trump escalated trade tensions by threatening to impose 35 percent tariffs on additional Canadian imports starting August 1. He reiterated claims that Canada had not done enough to control the flow of fentanyl across the border, a statement not supported by data.
The implications of the new American tariffs on products qualifying under the current free trade agreement between Canada, the United States, and Mexico remain unclear.
Mr. Trump has also indicated plans to impose tariffs on copper and has suggested targeting Canada’s dairy market, as well as its exports of pharmaceuticals and lumber.
The U.S. tariffs have effectively disrupted the trilateral free trade agreement established during Mr. Trump’s first term.
In addition to trade issues, Mr. Trump has incited anger among Canadians by suggesting Canada should be annexed as the 51st state and questioning its economic viability as a nation.
As relations with the United States deteriorate, Canada appears to be strengthening ties with Mexico. President Claudia Sheinbaum of Mexico announced that she and Mr. Carney discussed enhancing trade relations during the recent Group of 7 summit in Canada.
She mentioned that the two leaders had a phone conversation this week and that Mr. Carney is expected to visit Mexico for further discussions, although no specific date has been set.