'Steel is the very foundation of Canada.' Carney delivers aid package to industry, workers ravaged by Trump tariffs

“Steel is the very foundation of Canada. We will need much more of it to launch the projects of national interest that will unfold over the coming decades,” Carney said in French, speaking at a steel fabricator in Hamilton.

But the prime minister said that Canada needs to overcome “immediate challenges” in the industry, including “foreign competition that unfairly benefits from nonmarket policies and practices.”

“And now, the trade actions of the United States are further transforming global steel market dynamics and supply chains. Let’s be clear: Canada will be one of the countries most impacted by these developments,” Carney said.

The import caps are based on the levels other non-U.S. countries exported to Canada in 2024.

For countries that have an existing free trade agreement with Canada, the cap is 100 per cent of 2024 imports, with a 50 per cent tariff applied on steel above that cap. 

For countries which don’t have a free trade agreement with Canada, the cap drops to 50 per cent. A 50 per cent tariff will also be applied to all imports surpassing those levels.

The new tariff rate quotas are expected to kick in by the end of July, after the Carney government signalled last month that changes were on the way. 

A 25 per cent tariff will also be applied to all steel imported from non-U.S. countries that was melted and poured in China.

The head of the trade association representing Canadian steel producers said the import quotas will give Canadian producers a chance at finding a market for steel that would have otherwise gone to the U.S.

“We’ve lost the U.S. market at a 50 per cent tariff rate. We have six million tons of steel that was destined for the United States that needs to find a new market,” said Cobden, estimating that the gap left by the imposition of the quota could result in anywhere from 1.5 million to three million more tons of Canadian steel being used domestically.

But the bigger deal globally is the “country of melt” tariff on Chinese steel which has been shipped through other nations, Cobden said. She called it “an extraordinary step” which other countries struggling under a global glut of cheaper Chinese steel will be keeping a close eye on.

“I think even the U.S. will be impressed with this. This is globally leading,” said Cobden, who used the example of a steel pipe produced in China, but is then shipped to Vietnam, altered slightly — perhaps with threading to create a tighter seal — and then shipped here.

“Up until now, Canada would see that as Vietnamese steel,” said Cobden. “Now, today, they would see it as coming from China.” 

It’s not a perfect system, given that importers must declare the country of origin for their steel, Cobden said. But it’s still an extra tool for customs officials to use to stem the flow.

“Could they cheat there? Of course. Cheaters cheat,” said Cobden. “Will the Canada Border Services Agency watch this? Absolutely.”

The head of the United Steelworkers Canadian division praised Carney’s announcement. 

“It’s a giant step forward,” said Marty Warren, USW’s national director for Canada, “and gives me hope that our domestic industry will survive, and workers will be hired back.” 

What made him especially hopeful, said Warren, is that the government has committed to an ongoing dialogue with industry stakeholders if Wednesday’s measures aren’t as productive as hoped.

Carney also announced Wednesday that Ottawa will prioritize the purchase of Canadian steel in procurement for infrastructure projects, including those completed under Ottawa’s recently-passed major projects law, Bill C-5. 

The millions earmarked for retraining and supporting up to 10,000 steel workers affected by the tariffs will be administered through labour market development agreements (LMDAs) with provinces and territories.

Federal jobs minister Patty Hajdu told the Star that delivering the funding through the LMDA program made far more sense than trying to reinvent the wheel in the middle of a trade crisis.

“There was some contemplation as we were putting this together about delivering it from the federal government, but quite frankly, the LMDAs work very, very well,” said Hajdu. “At the end of the day, this is a time for everybody to be rowing together in the same direction. Squabbling about who’s going to get the credit or what’s behind these types of decisions is not the right thing.”

Carney said that the country’s existing arrangements under the Canada-United States-Mexico Agreement remain in place, “including no changes to our current trade measures” with the U.S.

“The combination of all these measures will ensure that Canadian steel producers have a bigger share of the Canadian market,” the prime minister said.

Back in March, Trump imposed 25 per cent tariffs on Canadian steel and aluminum, increasing those tariffs to 50 per cent in June.  

On Tuesday, Carney told reporters ahead of a cabinet meeting that there was “not a lot of evidence” that any country would be able to reach a tariff-free deal with Washington.

Carney on Wednesday faced heat from two opposition leaders for that admission, with Conservative Leader Pierre Poilievre writing on X that the prime minister’s comments were a “complete and utter capitulation” to the U.S.

Bloc Québécois Leader Yves-François Blanchet, meanwhile, said Carney “now has to admit his own failure” given his government’s previous hopes to reach a joint trade and security agreement without permanent tariffs. 

In Hamilton, Carney was asked what level of tariffs he would accept in a deal with the U.S., the deadline for which is now Aug. 1. — the same day Trump has threatened to slap a 35-per-cent tariff on imports from Canada.

The prime minister said it was a “good question,” but said if he answered it directly “it would be a bad response in the middle of a negotiation.”