Canada's Shifting Aluminium and Steel Policies: Impacts and Outlook

Amidst a volatile global trade landscape and with the aim of protecting its domestic industry, Canada has announced significant changes to its aluminium and steel policies. These new measures, including tariff adjustments, quota implementations, and public procurement preferences, are expected to reshape metal trade flows and have considerable impacts on exporting partners, including Vietnam.

Details of New Policy Measures

The Canadian government has implemented a series of measures to enhance the protection of its domestic aluminium and steel industries:

• Adjustment of Retaliatory Tariffs with the US: Effective July 21, 2025, Canada began adjusting its retaliatory tariffs on steel and aluminium imports from the United States, based on the outcomes of trade negotiations between the two nations.
• New Tariffs Based on Melted and Poured Origin: Canada is applying new tariffs based on the "melted and poured" origin for steel and aluminium. This measure aims to combat global overcapacity and unfair trade practices. Notably, Canada is imposing an additional 25% tariff on all steel products imported from any country if that steel was melted and poured in China. This implies that even steel processed in Vietnam but using Chinese billets will be subject to this tariff.
• Tariff Rate Quotas (TRQ) for Steel Imports:
  • For steel imported from non-Free Trade Agreement (FTA) countries with Canada, quotas are set at 50% of the 2024 import volume. Quantities exceeding this quota will incur a 50% tariff. This measure is effective immediately and will be reviewed after 30 days.
  • For countries with an FTA with Canada, such as Vietnam, the quota remains at 100% of the 2024 export value.
• Business Support Program: Canada has established two separate task forces for the steel and aluminium sectors to monitor trade activities and prices. Concurrently, the government has announced a loan program to support businesses affected by tariffs, with a total fund of up to 10 billion CAD.

Impact on Vietnam's Iron and Steel Exports

These changes in Canadian policy have had a clear impact on Vietnam's iron and steel export activities. In the first 5 months of 2025, Vietnam's exports of iron and steel (HS72 code) to Canada reached approximately 19 million USD, a sharp decrease of 38.6% compared to the same period in 2024. This sụt giảm này phần lớn là do chính sách hạn ngạch và thuế quan mới của Canada, đặc biệt là quy định về nguồn gốc "nấu chảy và đúc" có thể ảnh hưởng đến các sản phẩm sử dụng phôi thép từ Trung Quốc.

Although Vietnam has an FTA with Canada, the imposition of additional tariffs on steel originating from China poses a significant challenge for Vietnamese exporters who may use Chinese raw materials. This necessitates that Vietnamese businesses re-evaluate their supply chains and raw material origins to ensure compliance with the new regulations and maintain competitiveness.

Outlook and Challenges

Canada's protectionist policies reflect a broader trend among many nations in safeguarding strategic industries against global overcapacity and unfair trade practices. For steel exporters, especially from developing economies, adapting to increasingly stringent rules on origin and quotas will be a major challenge.

The Vietnamese steel industry needs to proactively monitor international trade policy developments, diversify export markets, and invest in production technology to enhance quality, reduce costs, and ensure clear and transparent raw material origins. This will not only help overcome trade barriers but also strengthen its competitive position in the global market.

Information compiled and updated as of July 24, 2025, based on reports concerning Canadian trade policies and import/export data.