New steps to stabilize Canada's steel and aluminum industries, which have been severely impacted by the US President Donald Trump's tariffs, with exports declining and job losses increasing, were revealed by Prime Minister Mark Carney.
A planned tax increase on US imports and a quota on foreign steel are part of the new federal program in the event that a trade agreement between the US and Canada cannot be reached within a month.
According to Carney, Canada's counter-tariffs on American steel and aluminum goods would either increase or decrease, depending on the outcome of the talks with Trump.
In light of continuing negotiations to exempt Canada from Trump's tariffs, Carney at the time declined to match the rate increase when Trump raised the US tariff rate on steel and aluminum from 25 percent to 50 percent earlier this month.
At this week's G7 summit in Alberta, the two presidents decided to try to come to a trade agreement within 30 days. Carney's remark today suggests that if a deal cannot be reached, he is prepared to increase Canada's retaliatory tariffs.
Imports of steel and aluminum from the United States will be subject to Canadian tariffs at a rate "consistent with the progress that's made," according to Carney. "We will review our response as the negotiations progress."
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According to Carney, he is implementing a new "tariff rate quota," as it is known in the trade community, which implies that while some imports of steel from overseas would be permitted, anything that exceeds that threshold will be subject to a high duty, making it more costly.
This action aims to boost Canadian steel's competitiveness and support an industry that has suffered greatly from Trump's punitive tariffs.
By making imports too expensive, the initiative aims to encourage Canadian businesses to employ native steel.
According to Carney, the administration is thinking about enacting more tariffs in the days ahead in an effort to curb the import of steel and combat "persistent global overcapacity and unfair trade."
This is in response to industry calls for the federal government to stop foreign firms from dumping cheap steel in Canada, harming domestic producers. The industry claims that this practice has only gotten worse since Trump imposed global steel tariffs.
The government's efforts to expedite the construction of large infrastructure and natural resource projects, according to Carney, will also benefit the beleaguered steel industry.
Carney's cabinet would have the power to expedite approvals for "nation-building" projects, many of which would require massive amounts of steel and aluminum during construction, under a government measure that is currently before in Parliament (C-5).
Jean Simard, president of the Aluminium Association of Canada, said in a statement that the measures are "at the right time" and send "a strong signal towards focused and accelerated negotiations."
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When Carney's deadline passes and there is no "positive" result, he warned, the industry would look for "agility and speed for government interventions."