Canada is preparing to raise duties on American metal imports and tighten procurement rules unless a deal with Washington is reached by July 21. The move escalates tensions in a rapidly shifting global trade landscape marked by overcapacity, retaliation, and supply chain recalibration.
Tariff Decision Hinges on U.S. Talks
Canada is ready to increase tariffs on U.S. steel and aluminum imports if negotiations with the Trump administration stall. Prime Minister Mark Carney said in an official statement that the rate adjustment, set for July 21, will reflect any progress toward a broader trade agreement. The move follows the U.S. doubling its tariff on Canadian steel and aluminum to 50% earlier this month.
In a related step, Canada will restrict federal procurement of steel and aluminum to domestic suppliers starting July 30. Finance Minister François-Philippe Champagne said the policy aims to shield Canadian producers from the impact of U.S. tariffs and prevent trade diversion.
Canada Targets Overcapacity and Dumping
Ottawa also plans to cap steel imports from countries without free trade agreements at 2024 levels, applying full tariffs on any excess. Additional trade measures are under review to address global overcapacity and what officials describe as unfair competition.
The U.S. initially imposed a 25% tariff on steel and aluminum in March and raised the rate to 50% on June 4. A 90-day pause on reciprocal tariffs is set to expire in mid-July. Carney met President Trump at the G7 summit this month, with both sides aiming to reach a deal within 30 days.
Procurement Will Move Before Policy Does
While governments negotiate tariffs, companies often move faster to protect operational continuity. For Canadian and U.S. manufacturers, rising uncertainty around cost, compliance, and eligibility for federal projects is likely to accelerate dual-sourcing, regional hedging, and emission-based vendor screening. If Canada follows Europe’s lead in linking procurement to carbon intensity, suppliers with higher-emission processes could face quiet disqualification, well before any formal policy change.
