U.S. President Donald Trump, joined by Commerce Secretary Howard Lutnick, holds up an executive order imposing tariffs on steel imports in the Oval Office at the White House on Feb. 10.Andrew Harnik/Getty Images
U.S. President Donald Trump announced 25-per-cent tariffs on all steel and aluminum imports, including from Canada, reigniting a trade conflict that could have serious consequences for Canada’s export-oriented metal producers.
Mr. Trump’s orders reinstate the tariffs he put in place on millions of tonnes of steel and aluminum imports during his first presidency, with a higher 25-per-cent levy on aluminum this time around. The tariffs will come into effect on March 12.
“It’s 25 per cent without exceptions or exemptions, and that’s all countries, no matter where it comes from,” Mr. Trump told reporters on Monday as he signed the executive orders in the White House.
“We don’t need it from another country. As an example, Canada. If we make it in the United States, we don’t need it to be made in Canada. We’ll have the jobs. That’s why Canada should be our 51st state,” he said, repeating a refrain of his in recent weeks questioning Canada’s sovereignty.
Ottawa declined to immediately announce retaliatory tariffs on American goods on Monday, but Innovation Minister François-Philippe Champagne said in an online statement that retaliation is coming and that Canada’s response would be “clear and calibrated.”
Mr. Trump said that he would be signing additional tariff orders over the coming month, “maybe on a weekly basis.” He said he would be looking at automobiles, pharmaceuticals and computer chips. “Cars is going to be a very big one, and a very important one,” he said.
Canada is the top supplier of both steel and aluminum to the United States, and Canadian producers rely heavily on the U.S. market. Around half of the steel produced in Canada, and more than 90 per cent of the aluminum, are currently sent south across the border, with combined exports worth around $35-billion last year.
The announcement is the latest sign that Mr. Trump intends to use tariffs aggressively to remake America’s place in the global trading system. He threatened steep levies on all Canadian and Mexican imports but announced a 30-day pause after the countries made some concessions on border security. And he imposed an additional 10-per-cent tariff on Chinese imports, continuing the trade war he started in his first term.
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Mr. Champagne said in the statement posted on X that Canada is studying Mr. Trump’s announcement and consulting with allies. During the last steel-aluminum trade war in 2018, Ottawa imposed retaliatory tariffs on $16.6-billion of U.S. imports.
It was “totally unjustified” for the United States to impose these tariffs on its closest ally, Mr. Champagne said.
“Canadian steel and aluminum support key industries in the U.S. from defence, shipbuilding, energy to automotive,” he said. “We will continue to stand up for Canada, support our workers and defend our industries as we always have done and always will.”
The tariffs, which Mr. Trump promised a day earlier, will be imposed under Section 232 of the Trade Expansion Act of 1962, which gives the President the authority to restrict trade on the grounds of national security. Mr. Trump used these powers in 2018, when he put 25-per-cent tariffs on steel and 10-per-cent tariffs on aluminum from Canada and other countries.
Steel coils sit at the ArcelorMittal Dofasco steel production facility in Hamilton, Ont., on Feb. 10. The impact of Trump's tariffs on steel and aluminum imports will extend to downstream products that use foreign-made steel, including fabricated structural steel, aluminum extrusions and steel strand for prestressed concrete.Nick Iwanyshyn/The Canadian Press
The tariffs will extend to downstream products that use foreign-made steel, including fabricated structural steel, aluminum extrusions and steel strand for prestressed concrete. That’s a broader set of goods than in 2018.
After telling reporters on Monday there would be no exemptions to the steel and aluminum tariffs, Mr. Trump said he agreed to consider exempting Australia in view of the country’s trade surplus with the United States. This followed a phone call with Australian Prime Minister Anthony Albanese.
The steel and aluminum tariffs will be felt particularly in Ontario and Quebec, where both industries are concentrated. The steel sector directly employs around 23,000 workers, while the aluminum sector employs around 9,500, according to their industry associations.
Premiers Doug Ford of Ontario and François Legault of Quebec will be in Washington this week alongside premiers of other provinces and territories to press the country’s case.
“Trump’s tariffs are a direct attack on workers and communities,” Marty Warren, United Steelworkers union national director for Canada, said in a statement. “We’ve been through this before and we know these kinds of reckless trade measures don’t work, and hurt workers, destabilize industries and create uncertainty across the economy on both sides of the border.”
Canadian Chamber of Commerce president Candace Laing said the new steel and aluminum tariffs make it clear “perpetual uncertainty is here to stay” and urged the recall of Parliament to support steel and aluminum workers and the industries.
She noted Mr. Trump is still holding the threat of 25-per-cent tariffs on all Canadian products – and 10 per cent on energy and critical minerals – over the heads of this country after pausing the levies for one month.
“Businesses and investors already feel on shaky ground with the 30-day tariff pause, and now our steel and aluminum industries – critical to the shared success of both the American and Canadian economies – are first into the fire.”
Trucks leave the ArcelorMittal Dofasco steel production facility in Hamilton on Feb. 10.Nick Iwanyshyn/The Canadian Press
Canada’s steel industry is particularly captive to the U.S. market. Canadian producers sent 5.9 million tonnes of steel to the United States in 2024, well ahead of second- and third-place Brazil and Mexico. The ability of Canadian producers to redirect products to other markets is limited, given low-cost Chinese steel has flooded global markets, and shipping costs for the heavy metal are high.
Canadian Steel Producers Association chief executive officer Catherine Cobden said in statement on Sunday, after Mr. Trump first suggested the tariffs, that they were “baseless and unwarranted” and that Canada will be obliged to “retaliate immediately.”
The aluminum industry may have an easier time redirecting products to other markets. It also has a stronger negotiating position in the U.S. market, as American industries rely heavily on Canadian aluminum to produce everything from automobiles to military equipment to beverage cans.
Smelters in the U.S. produced around 750,000 tonnes of primary aluminum in 2023, while total consumption in the country was around five million. The 3.1 million tonnes coming from Canada made up a large part of that difference.
Jean Simard, president of the Aluminum Association of Canada, said Americans will suffer as a result of these tariffs.
“Remembering how disruptive a 10-per-cent tariff was for the U.S. industry, I can only begin to imagine how destructive a 25-per-cent tariff will be for the U.S. economy,” Mr. Simard said in a statement. “We’ve seen this play out before five years ago, and we are ready to take on this challenge once again.”
The steel and aluminum tariffs will be felt hardest in Ontario and Quebec, where both industries are concentrated. The steel sector directly employs around 23,000 workers, while the aluminum sector employs around 9,500. Alcoa's Becancour aluminum smelter, in Becancour, Que., on Feb. 10.Bernard Brault/Reuters
Earlier this month, the Aluminum Association, which represents the industry in the U.S., warned of major disruptions if Mr. Trump hit Canada with tariffs.
“The U.S. industry sources around two-thirds of the primary aluminum it uses every year from Canada, since all U.S.-based smelters, even running at full capacity, cannot produce nearly enough metal to meet demand. And about 90 per cent of U.S. scrap imports come from either Canada or Mexico. It would take billions of investment over decades to make the United States fully self-sufficient for its metal needs,” the association said in a statement on Feb. 1.
The impact of the tariffs in 2018 was immediate and severe for both the steel and aluminum industries. Canadian exports of both metals jumped in the months between when the tariffs were announced and when they came into effect, as companies tried to front-run the levies. They then plummeted when the tariffs came into force.
Average monthly steel exports during the year the tariffs were in place were around 14 per cent lower for steel, and 19 per cent lower for aluminum, compared with 2017. They recovered quickly when the tariffs were lifted in 2019.
While these tariffs could cause significant hardship to workers, companies and regions where the industries are based, they’re unlikely to have a major impact on the overall Canadian economy, Bradley Saunders, North America economist at Capital Economics, wrote in a note to clients.
“Steel and aluminum exports together only comprise around 5 per cent of total goods exports to the U.S., or 1 per cent of GDP. As a result, tariffs on these products will be far less damaging than some of those which Trump targeted last week, such as energy and motor vehicles,” Mr. Saunders wrote.
American steel companies and unions have long pushed for protection of the U.S. steel industry. This has ramped up in recent years, as China has pushed more low-cost steel onto global markets. American officials have become concerned that Canada and Mexico have become backdoors for Chinese steel entering the North American market – something both countries dispute.
The U.S. lifted its tariffs against Canada in 2019 after both countries agreed to a monitoring system to track Chinese steel entering the market. They also agreed to a mechanism that would allow either country to impose tariffs if there was an unusual surge in steel and aluminum exports to the other country. Canadian exports volumes for both metals have increased but hardly spiked since the tariffs were lifted.
With a report from Reuters
Editor’s note: An earlier version of this story stated the tariffs could come into effect on March 4. The actual date is March 12.