Canada Preparing New Tariffs 'Pending Developments' in US Trade Talks
Canada is preparing new and revised tariffs, along with a tariff quota, to address what it said is the Trump administration’s “unfair trade” measures in the steel and aluminum sectors. The new tariffs and other measures will be in place as Canada negotiates a new “economic and security partnership” with the U.S., the country’s Department of Finance announced June 19.
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Mark Carney, Canada’s prime minister, said the country “will take the time we need to negotiate the best deal for Canada, but no longer,” and is making sure that companies are “protected from the unjust U.S. tariffs” during those talks.
“The government remains prepared to take additional steps as needed and will continue to review the appropriateness of its response, pending developments with U.S. tariffs,” the Department of Finance said. “The federal government will continue to work closely with provinces and territories to ensure their input and regional interests are reflected in its response to the U.S. tariffs.”
Canada said it plans to “adopt additional tariff measures over the coming weeks to address risks associated with persistent global overcapacity and unfair trade in the steel and aluminum sectors,” which it said have been “exacerbated by U.S. actions.” The duties will be applied on the basis of the country of melt and pour for steel and country of smelt and cast for aluminum.
The country also will be revising its current counter-tariffs on U.S. 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.” Canada didn’t say whether it expected those duties to increase or decrease.
The announcement comes after Trump earlier this month doubled tariffs on steel and aluminum to 50% (see 2506030071)
Canada also will establish new tariff rate quotas at 100% of 2024 levels on imports of steel products from non-free trade agreement countries, which Canada said will “stabilize the domestic market and prevent harmful trade diversion as the result of the U.S. actions that are destabilizing markets.” Those quotas will be applied retroactively and will be reviewed in 30 days.
Beginning June 30, the country also will begin limiting who can participate in federal procurement, including by narrowing procurement to “reliable trading partners that provide reciprocal access to suppliers from Canada through trade agreements.” Another initiative will create two new joint government-industry task forces, one for steel and one for aluminum, which will meet regularly to “support government decision making.”
Canada added that a “remission process” is in place to give businesses relief as they adjust their supply chains to the trade disruptions, with remissions “currently granted under narrow, time-limited conditions to ensure a targeted and balanced approach.” The country said more “individual requests are expected to be approved in the coming days,” and the remission framework will “favour the use of Canadian steel and aluminum in Canadian-made products."