Question Period Note: CANADA’S STEEL AND ALUMINUM SECTORS - IMPACTS OF U.S. TARIFFS

What is the Government of Canada doing to support Canada’s steel and aluminum sectors considering U.S. tariffs?

• The Government of Canada is committed to maintaining a strong Canadian steel and aluminum industry and the good-paying jobs that come with it.
• On June 19, the government announced new measures to safeguard workers and businesses from U.S. tariffs, and may adjust counter-tariffs on July 21 based on current negotiations.
• The government continues to consult industry on further measures to counter unfair trade practices and restore access to the U.S. market.
• U.S. tariffs are hurting millions of people on both sides of the border by raising cost, raising prices, and lowering demand.
• Canada will ensure workers and industry are protected against the unjust and unprovoked American tariffs.

• Any measure that shuts out Canadian steel and aluminum exports harms U.S. companies and integrated supply chains that rely on long-term contracts and just-in-time delivery.
• Canada has responded to the tariffs by introducing a suite of countermeasures designed to urge the U.S. to remove them as soon as possible.
• Canada and the U.S. have balanced steel and aluminum trade which shows how strongly connected their economies are.
• As global risks and unfair trade grow, Canada is engaging and partnering with reliable trading partners and allies around the world and strengthening its relationships with them to foster economic security, resilience, and trade diversification.
• Canada stands with its allies in opposition to unfairly traded imports that displace market-based metals.

In 2018, the U.S. government imposed Section 232, a 25 percent tariffs on global steel and aluminum imports, including from Canada. Canada received an exemption from these tariffs in 2019, but tariffs were re-imposed in March 2025. In addition to the global 25 percent tariffs on all steel and aluminum imports, on May 30, 2025, President Trump announced an intent to increase the tariff on steel and aluminum imports into the US to 50 percent as of June 4, 2025. As these are stackable, aluminum originating from markets other then Canada and Mexico may face a cumulative 35 percent tariff.
Supplementary info on unfair trade: The issue of unfair trade is not new and is typically the result of companies seeking to recoup losses from overproduction. The sources of this overproduction, often dubbed "excess capacity," are numerous but are usually the result of government policies aimed at boosting production. The resulting outcome is that these cheap metals are entering the North American market and severely undercutting domestic producers.
In response to unfair trade concerns and its impact on meeting national security objectives, the U.S. has increasingly imposed protectionist measures on most imports of steel and aluminum, including those from Canada, to increase domestic steel production capacity utilization.
Current Impacts
Steel: Half of Canada’s crude steel production is exported annually to the U.S. and much of it is bespoke for manufacturing. Depending on existing contracts Canadian firms have with U.S. clients and demand dynamics for specific products, some firms are shielded from the tariffs’ immediate impact. In contrast, others are forced to bear additional costs and are seeing a drop in demand for their products. Overall, most major firms have reported a drop in shipments to the U.S. and other significant operational disruptions that have forced them to adjust production and lay workers off.
Aluminium: The U.S. lacks competitive advantages in primary aluminum production and is dependent on Canadian firms. As the U.S. has 35 percent tariffs on most large global sources, Canada’s industry should be able to trade through a 25 percent wall to some degree, albeit at lower volumes. However, the tariff measures have increased the price of aluminium sold in the U.S., which will proliferate demand destruction over time if prices are maintained, reducing demand for Canadian-made aluminium. Canadian producers can sell to alternative markets such as Europe, but this has become less attractive as the price of aluminium in other global markets has dropped due to forecasted supply increases and recession concerns.