On Thursday, Canadian Prime Minister Mark Carney announced sweeping new plans aimed at protecting Canadian metal producers.
What Happened: These plans include counter-tariffs on American steel and aluminum if no trade agreement is reached between the two nations before July 21.
“We will take the time we need to negotiate the best deal for Canada, but no longer,” Carney said, according to a news release by the Canadian Department of Finance. “In parallel, we are ensuring that workers and industries are protected from the unjust U.S. tariffs.”
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The measures unveiled by Canada’s Finance Minister, François-Philippe Champagne, include a tariff rate quota system capping 2025 steel imports from non-FTA countries at 2024 levels. This is essentially a cap on how much steel Canada will allow from countries with whom it does not have a free-trade agreement.
The government is also imposing reciprocal procurement policies beginning June 30, which effectively shut out U.S.-based suppliers from federal contracts unless reciprocal access is granted for Canadian companies in U.S. federal contracts.
“Canadian workers and industries can count on us,” Champagne said. “We are taking strong, targeted action to respond to the unjust American tariffs.”
Other moves include restrictions on U.S. access to Canadian government contracts starting June 30, as well as stricter rules around where foreign steel and aluminum were originally produced. The government will also expand oversight through new industry task forces and maintain a $10 billion loan facility to support companies affected by the tariffs.
The government further plans measures to address the risks of overcapacity and unfair trade practices in the steel and aluminum industries, which it says have been exacerbated by U.S. actions.
These measures come weeks after President Donald Trump’s decision earlier this month to double the tariffs on U.S. steel imports to 50%.
Why It Matters: This comes amid growing warnings from experts that the tariffs on steel and aluminum will suppress demand across the continent.
According to Jean Simard, President of the Aluminum Association of Canada (AAC), “It [the tariffs] will impact workers on both sides of the border and disrupt key sectors including defense, construction, and automotive.”
Analysts have been quick to point out the impact the tariffs are set to have on American automakers, especially Ford Motor Co. F, which Alex Tsepaev, the chief strategy officer at B2PRIME Group, blames on the company’s U.S.-centric manufacturing.
“A 50% tariff could inflate COGS significantly just as pricing power erodes in both EV and ICE segments,” Tsepaev told Benzinga.
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