The U.S. pulls back on plans to double tariffs on Canadian metals after trade tensions ease.
A Sudden Shift in U.S.-Canada Trade Policy
The Trump administration has abandoned its plan to raise tariffs on Canadian steel and aluminum to 50%, reversing course just one day after announcing the hike. The decision follows Ontario’s decision to step back from imposing a retaliatory tariff on U.S. energy exports, signaling a de-escalation in the latest trade standoff.
Peter Navarro, President Trump’s counselor for U.S. trade and manufacturing, stated in an interview that “cooler heads prevailed” after negotiations between U.S. and Canadian officials. While the additional duty has been scrapped, the 25% tariff on all steel and aluminum imports, ordered by the president last month, still takes effect as planned.
Canada remains the largest supplier of steel to the U.S., shipping more than 6.5 million tons in 2024—significantly outpacing other exporters like Brazil. The country also leads in aluminum exports, supplying over 3 million metric tons last year. Any tariff shift on these materials has immediate consequences for manufacturers and suppliers across North America.
Lingering Uncertainty for North American Trade
The tariff reversal may have prevented an immediate escalation, but trade tensions between the U.S. and Canada remain unresolved. Trump had initially justified the higher duties as a direct response to Ontario Premier Doug Ford’s move to impose a 25% tariff on electricity exports to key U.S. states. In addition to pressing Canada to lift those tariffs, Trump has demanded the removal of duties on U.S. dairy products, including milk, butter, and cheese.
Some Canadian tariffs have been temporarily paused, with a deadline of April 2 for resolution. Key goods, including automobiles, are currently exempt, but Trump has warned that failure to meet his demands will trigger a “substantial” increase in U.S. duties on Canadian vehicles and other exports. The president has also reiterated his broader plan to impose reciprocal tariffs on all trading partners starting the same day.
Uncertainty remains the dominant theme in U.S.-Canada trade relations. While this tariff reversal offers temporary relief, businesses operating across the border are left navigating shifting policies and unpredictable negotiations. The risk of further disruptions looms, making long-term stability elusive for supply chain leaders.
