Canada has unveiled a new initiative aimed at bolstering its steel and lumber industries, specifically designed to counteract the impact of U.S. tariffs. Prime Minister Mark Carney announced this plan during a news conference, emphasizing the need for enhanced support and protections for workers in these sectors.
As part of the strategy, Ottawa will significantly reduce the quota for steel imports from countries lacking a free trade agreement with Canada, slicing it down to 20 percent of 2024 levels from the previous 50 percent. For nations with which Canada does hold FTAs, import quotas will be adjusted to 75 percent from 100 percent of the 2024 levels. Notably, this provision excludes the United States and Mexico, which remain bound by the United States-Canada-Mexico Agreement (USMCA).
In addition to these quota adjustments, Canada will impose a sweeping 25 percent tariff on selected imported steel-derivative products and implement border regulations to combat steel dumping. This marks a tightening of previously established measures, which were already put in place in July to address the influx of foreign steel into Canadian markets. The steel industry, a significant contributor to the national economy with an annual output exceeding 4 billion Canadian dollars (approximately $2.8 billion), employs over 23,000 individuals directly.
Carney also noted that the ongoing trade tensions stem from U.S. tariffs originally enacted by former President Donald Trump, which have severely affected both steel and lumber sectors. Currently, softwood lumber is taxed at 45 percent—an increase following Trump’s earlier tariff hikes. Carney remarked on the shift in the economic relationship between the two nations, stating, “The decades-long process of an ever-closer economic relationship between Canada and the U.S. is now over.” He pointed out that over 75 percent of Canadian exports are directed towards the U.S., including 90 percent of its lumber, aluminum, and steel exports.
To further bolster domestic industries, the Canadian government plans to collaborate with railway companies to reduce freight rates for transporting steel and lumber between provinces by 50 percent, starting early next year. This measure aims to make it more economically viable to utilize local resources in construction and other sectors.
In response to tariff-related challenges, the government will also provide financial assistance to businesses facing operational restructuring, liquidity issues, and workforce impacts due to the tariffs.
Tensions with the U.S. have escalated recently, particularly after the Ontario provincial government aired advertisements in American markets criticizing Trump’s tariffs, citing former President Ronald Reagan’s speeches. In light of these developments, Carney is set to attend the FIFA World Cup 2026 tournament draw in Washington on December 5, where he intends to engage with Trump and reiterate Canada’s readiness to resume trade discussions whenever the U.S. is receptive.
Meanwhile, U.S. companies continue to feel the strain of these tariffs. For instance, Deere & Co., the renowned manufacturer of John Deere tractors, announced an anticipated increase in its tariff-related costs for the next fiscal year, projecting a pre-tax financial impact of roughly $1.2 billion in 2026, up from nearly $600 million in 2025.
As these trade dynamics evolve, the Canadian government remains focused on fortifying its domestic industries and ensuring that Canadian resources are prioritized amidst challenging international trade conditions.
