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Canada’s steel industry has warned of “devastating” unemployment, slowing factories and supply chain disruptions after US President Donald Trump doubled tariffs on imports to 50%.
Trump’s latest tariff move has sparked rage across the border as Canadian Prime Minister Mark Carney traveled to the White House last month, and after Washington imposed heavy taxes on its biggest trading partner, hence only travelling to the White House to repair the conflict.
Canada is the largest supplier of US steel and aluminum, accounting for almost a quarter of US steel imports in 2023 and about half of last year’s aluminum imports.
“While a 25% tariff is difficult, a 50% tariff is devastating,” said Catherine Cobden, president of the Canadian Steel Producers Association.
According to the CSPA, steel is a $15 billion (US$1.1 billion) industry that employs 23,000 Canadians and supports an additional 100,000 indirect employment.
“Tax on steel at this level creates massive disruption and negative outcomes across the highly integrated steel supply chain on both sides of the border and across the customer,” Cobden said.
As the newly elected prime minister, Carney went to the oval office, hoping to reset the relationship damaged by Trump’s threat to his Canadian appendix, and to hit it with a 25% tariff.
The two leaders said they successfully completed a North American free trade agreement during Trump’s first term and are open to renegotiating the US-Canada agreement, a trade agreement that will be reviewed next year.
But on Friday, Trump told a rally in West Mifflin, Pennsylvania, that he would double the tariffs on steel and aluminum to 50% in the escalation of the world trade war.
Cobden said Trump’s new threat “essentially shuts down the US market” and “produces irreparable consequences.”
The Canadian Aluminum Association said it was waiting for a “clearer and more formal legal confirmation” before commenting on the potential implications.
International Trade Minister Dominique LeBlanc said Canada remains “decisive” in advocating for workers and communities.
“When we negotiate new economic and security ties with the US, Canada’s new government will stand strong to get the best deal for Canadians,” he said in a post on social media platform X on Saturday.
The tariff announcement came in the same week when Trump said some of his ambitious “Golden Dome” missile defense shields would cost $61 billion, but would be free if Ottawa gave up its sovereignty to become the 51st US.
A spokesperson said Carney was “clear on every opportunity, including in conversations with President Trump that Canada is an independent, sovereign nation and that it will remain one.”
The US president announced an increase in taxes on Friday as he touted a $15 billion partnership between Nippon Steel and US steel at a Pennsylvania rally and pledged to build a tariff “fence” on domestic metal production.
The new taxation will come into effect Wednesday, the president wrote in the Truth Social Post following the event.
Earlier in the week, the U.S. federal court of appeals suspending Trump’s “liberation day” tariffs and rulings deemed illegal.
Canada has announced a “dollar for dollar” response to US tariffs affecting $12.6 billion worth of steel products, $3 billion worth of aluminum products, and $14.2 billion worth of additional US goods.
These tariffs, which began in March, lie on the first retaliation collection on $300 billion in US goods. However, in mid-April, Canada quietly eased its stance by easing some of the measures taken by US automakers and manufacturers.
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Canadian ministers and local leaders meet in Saskatoon, Saskatchewan on Monday as part of Carney’s efforts to diversify the economy from excessive dependence on the US.
“This is not a trade policy, it’s a direct attack on Canadian industries and workers,” says Marty Warren, Canada’s National Director of United Steel Workers.
“Thousands of Canadian jobs are on the line, and communities relying on steel and aluminum are at risk. Canada needs to respond promptly and decisively to protect its workers.”
Goldie Haider of Canada’s Business Council said Trump’s statement was best to keep focused on updating the USMCA.
“These moving goal posts are just a strategy to give Canada more,” he said.
