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Investing.com -- Prime Minister Mark Carney unveiled a sweeping industrial strategy Wednesday aimed at reinforcing Canada’s steel sector, as the country grapples with U.S. tariffs and surging global steel distortions. The measures are designed to curb harmful trade diversion, strengthen domestic supply chains, and prepare Canadian producers for deep shifts in global steel markets.
Canada is among the most exposed advanced economies to structural shifts in the steel industry, given its large export volumes, open import market, and high per capita consumption. “Our steel industry will be central to Canada’s competitiveness, our security, and our prosperity,” said Carney in announcing the initiative.
The government will impose a series of targeted tariff changes, reducing the steel import quota for non-free trade agreement (non-FTA) countries to 50% of 2024 volumes, with a 50% tariff on imports above that threshold. For FTA partners outside the U.S., the quota will remain at 100% of 2024 levels with the same overage tariff, while existing USMCA rules covering U.S. imports remain unchanged.
Further, by the end of July, a 25% tariff will apply to all steel imports from non-U.S. countries containing steel “melted and poured in China.” These measures, according to government statements, aim to “prevent harmful trade diversion amid current tensions in global steel trade,” particularly in light of U.S. tariffs that have disrupted North American supply chains.
Beyond defensive tariffs, the government pledged C$1 billion through the Strategic Innovation Fund to help Canadian steel producers develop new products and onshore capabilities. Another C$70 million will go toward Labour Market Development Agreements to support and reskill up to 10,000 affected workers in the steel sector.
The federal government is also preparing a major expansion of financial supports through Regional Development Agencies and the Business Development Bank of Canada, including C$150 million in regional tariff response funding and enhanced access to low-cost loans. Minimum eligibility thresholds for the Large Enterprise Tariff Loan program will be lowered significantly, extending access to more mid-sized firms.
Procurement rules will also be revised to channel more federal construction and infrastructure spending toward domestic producers. “As Canada moves from reliance to resilience, Canada’s new government is taking a series of major measures to support, reinforce, and transform the industry,” Carney said.
The measures come as Canada continues negotiations with Washington following the Trump administration’s decision to impose 25% tariffs on Canadian steel in March, which were later increased to 50% in June. With no resolution yet in place, Ottawa’s approach aims to stabilize its domestic market while sending a signal of long-term commitment to national industrial capacity.
Canadian steel company Algoma Steel Group Inc (TSX:ASTL) saw shares rise 3.2% following the announcement.