Canada Threatens Higher Tariffs On US Steel, Aluminum If No Trade Deal By Next Month

Canada said on Thursday it intends to raise the tariffs on U.S.-made steel and aluminum products if it fails to reach a trade deal with the Trump administration.

Ottawa “will adjust its existing counter-tariffs on steel and aluminium products on July 21, to levels consistent with progress that has been made in the broader trading arrangement with the United States,” the Canadian government said. It has currently set a tariff of 25% on U.S. exports of the metals.

Earlier this month, U.S. President Donald Trump increased the tariffs on steel imports to 50% from 25%, putting further pressure on the Canadian steel industry that ships the bulk of its products to the U.S.

“We will take the time we need to negotiate the best deal for Canada, but no longer. In parallel, we are ensuring that workers and industries are protected from the unjust U.S. tariffs,” Carney said.

The two governments have currently agreed to a mid-July deadline to wrap up a trade deal. Canada is also implementing reciprocal procurement policies to ensure federal projects procure steel from domestic suppliers and “reliable trading partners,” which provide reciprocal access to Canadian suppliers through trade agreements.

The Carney-led government also plans to introduce new tariff rate quotas of 100% of 2024 levels on imports of steel products from non-free trade agreement partners to stabilize the domestic market. There are concerns in Ottawa that foreign exporters might re-route their shipments to the country.

According to a Bloomberg report, Carney said that a true free trade deal was the best possible outcome of the talks, when journalists asked whether Canada would accept some U.S. tariffs.

“If it’s in Canada’s interest, we’ll sign it. If it’s not, we won’t,” he reportedly said.

Retail sentiment on Stocktwits about Alcoa, which has manufacturing operations in Canada, was in ‘bearish’ (26/100) territory, while retail chatter was ‘high.’

The Canadian Steel Producers Association said the government initiatives fall “short of what our industry needs at this most challenging time.”

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