Canada Takes Action: Imposes New Tariffs to Protect Domestic Steel Industry

Ottawa, July 19, 2025 – In a significant move to protect its domestic industry, Canadian Prime Minister Mark Carney announced a series of new tariff measures on imported steel on July 16th. These measures are designed to counter trade diversion resulting from high US tariffs and to combat dumping practices, with a specific focus on steel products originating from China.

Details of the Tariff-Rate Quota (TRQ) Measures

To control the volume of imported steel, Canada will implement a Tariff-Rate Quota (TRQ) system with specific rules:

• For countries without a Free Trade Agreement (FTA): The tariff-free import quota will be tightened, reduced from 100% to 50% of 2024 volumes. Any quantity exceeding this quota will be subject to a 50% tariff.
• For FTA partners (excluding the US and Mexico): A new TRQ system will be effective August 1, 2025. Under this system, these countries are granted tariff-free access for up to 100% of their 2024 import volumes. Shipments exceeding this level will also face a 50% tariff.
• Specific Tariff on Chinese-origin Steel: A notable measure is the imposition of an additional 25% tariff on all steel products (imported from any country other than the US) that contain steel "melted and poured" in China. This is aimed at preventing tariff circumvention.

The affected products include various carbon, alloy, and stainless steel items.

Comprehensive Support Package for the Steel Sector

In parallel with the tariff measures, the Canadian government also announced a major financial support package to strengthen the domestic steel industry:

• C$1 billion allocated to the Strategic Innovation Fund to help steel companies enhance their competitiveness and develop new products.
• C$150 million for the Regional Tariff Response Initiative.
• C$70 million to support retraining and employment insurance for approximately 10,000 steelworkers.
• Prioritizing the use of Canadian-made steel in government procurement projects.

Reactions and Outlook

Canada's measures come as the US maintains its 50% tariff on steel, creating concerns that large volumes of cheap steel could be diverted to the Canadian market. The decision has garnered support from domestic steel producers but has also drawn opposition from China.

The Chinese Embassy in Ottawa has criticized the tariffs, claiming they violate World Trade Organization (WTO) rules and has threatened countermeasures. This development signals a new phase of tension in global steel trade, as Canada attempts to balance the protection of its domestic industry with maintaining its international trade relationships.