Canada's new government has announced a robust package of measures designed to protect its steel and Aluminium sectors and workers from what it calls "unjust and unprovoked American tariffs." The comprehensive plan, unveiled by Finance Minister François-Philippe Champagne on June 19, signals Canada's determination to build the strongest economy in the G7 while simultaneously negotiating a new economic and security partnership with the United States.
The Canadian government has outlined a multi-pronged approach. First, effective July 21, Canada will adjust its existing counter-tariffs on U.S. steel and aluminium products, aligning them with progress made in broader trade discussions. This calibrated response aims to maintain leverage in ongoing negotiations while demonstrating a willingness to de-escalate if a favorable agreement is reached.
Second, beginning June 30, Canada will implement reciprocal procurement policies. This means limiting access to federal government contracts to suppliers from Canada and its reliable trading partners who offer reciprocal access to Canadian suppliers through existing trade agreements. This measure is complemented by an ongoing exploration of ways to maximize the use of Canadian steel and aluminium in all government-funded projects, including through coordination with provincial and territorial governments.
To further bolster its domestic market and prevent trade diversion, the government will establish new tariff rate quotas. These quotas, set at 100% of 2024 import levels, will apply to steel products from non-free trade agreement partners, directly addressing market destabilization caused by U.S. actions. These quotas will be applied retroactively and will undergo a review within 30 days to assess their effectiveness.
Looking ahead, Canada plans to adopt additional tariff measures in the coming weeks to confront risks associated with persistent global overcapacity and unfair trade practices in the steel and aluminium sectors, issues exacerbated by the U.S. tariffs. These measures will be applied based on the "country of melt and pour" for steel and "country of smelt and cast" for aluminium, ensuring a more precise targeting of problematic imports.
In a proactive step to ensure continuous monitoring and responsiveness, the government will immediately establish two government-stakeholder task forces – one for steel and one for aluminium. These committees will meet regularly to closely monitor trade and market trends, providing crucial insights to inform government decision-making and better support Canadian industries and workers.
Finally, the existing $10 billion Large Enterprise Tariff Loan facility remains open to applicants. This program provides crucial liquidity to eligible large businesses struggling to access traditional market financing due to the U.S. trade actions, aiming to help them sustain operations and regain financial resilience as market conditions stabilize.
