Canada could slap more duties on US steel and aluminium, says Carney
OTTAWA: Canada could increase counter-tariffs on US-produced steel and aluminium if it does not reach a broader trade deal with President Donald Trump within 30 days, Prime Minister Mark Carney said on Thursday.
Trump increased import duties on steel and aluminium to 50 per cent from 25 per cent earlier this month, prompting industry calls for an official response. Trump's move could hurt Canada, which is the largest seller of the metals to the US.
Carney said on Monday he had agreed with Trump that the two nations should try to wrap up a new economic and security deal by July 21.
"Canada will adjust its existing counter-tariffs on US steel and aluminium products on July 21 to levels consistent with progress made in the broader trading agreement with the United States," Carney told a press conference.
Carney refrained from immediately matching Trump's June tariff hike, saying he wanted to see progress on talks to create a new economic and security relationship.
On March 13, Canada imposed 25 per cent retaliatory tariffs on a list of steel products worth C$12.6 billion and aluminium products worth C$3 billion.
As part of Thursday's announcement, Canada will implement new procurement rules, under which Canadian producers and trading partners who have tariff-free reciprocal access can compete for federal procurements of steel and aluminium.
Carney said Canada would establish new tariff-rate quotas of 100 per cent of 2024 levels on imports of steel products from non-free trade agreement partners "to stabilise the domestic market and prevent harmful trade diversion."
Canada ships over 90 per cent of its total steel and aluminium exports to the US and consumes about one-fifth of US exports of steel and 50 per cent of its aluminium exports, according to the Royal Bank of Canada, highlighting the critical metals trade between the two countries.
Under Carney, Canada has also lined up an array of projects to build infrastructure, starting from defence, oil and gas pipelines to doubling housing capacity – all of which will require tonnes of steel and aluminium.
"We are united in working on all forms of support for the industry... that starts with buying Canadian steel and aluminium for federal projects," Carney said while addressing questions from the media.
As part of the new measures, the government will also favour the use of Canadian steel and aluminium in Canadian-made products and will create a task force to monitor how the steel and aluminium markets are evolving under the tariff regime.
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