Canada Grants Steel & Aluminum Tariff Exemptions Amid Trade Tensions

The Liberal government is facing criticism after exempting certain Chinese and U.S. steel and aluminum imports from retaliatory tariffs, a move that has drawn pushback from domestic producers.

A recently released order-in-council reveals that Ottawa has granted dozens of Canadian companies relief from tariffs on specific products, citing supply shortages or pre-existing contracts. These exemptions mean that certain imports can enter Canada without incurring retaliatory duties, alleviating some of the financial burden on Canadian businesses.

However, the Canadian Steel Producers Association (CSPA) has strongly opposed the exemptions. Catherine Cobden, CEO and president of the CSPA, expressed disappointment over the decision, especially concerning U.S. producers. “We are disappointed to see a broad exception to tariffs was given to U.S. producers for another two months, while we suffer from lack of access to their market,” she said.

Cobden also criticized the apparent new exemptions granted to importers of Chinese steel. “It is inconceivable that Canada appears to have granted a series of new exemptions to importers of Chinese steel. Canadian producers can replace this ‘unfair’ steel from the marketplace,” she added.

Calls for Stronger Measures Against China and the U.S.

The steel industry has long lobbied Ottawa to take a tougher stance against what it considers unfairly traded steel imports from China. Currently, Canada imposes a 25 percent tariff on Chinese steel and aluminum. Cobden has urged the government to increase retaliatory tariffs on U.S. steel to match the 50 percent tariff imposed by the Trump administration on Canadian steel.

Ontario Premier Doug Ford has also pushed Prime Minister Mark Carney to respond aggressively after the U.S. claimed a new victory when Stellantis announced the relocation of Canadian Jeep production from Brampton, Ontario, to the U.S. Carney, however, ruled out immediate retaliation, citing ongoing “intense negotiations” with the Trump administration. Canada is reportedly seeking deals to protect key sectors, including aluminum, steel, and energy.

Government Perspective: Protecting Canadian Businesses

Finance Minister François-Philippe Champagne defended the exemptions, stating that they were designed to support Canadian workers and families by ensuring that domestic businesses are not unduly harmed by foreign countermeasures.

International trade lawyer William Pellerin, representing companies seeking these exemptions, explained that the order-in-council includes provisions that allow Canadian manufacturers to import foreign steel or aluminum for domestic production without paying tariffs. “That’s very important because it goes directly to the companies’ bottom line and their ability to make products competitively priced in Canada,” Pellerin said. He noted that without these exemptions, many Canadian manufacturers would struggle to source replacement materials, which could drive up domestic prices.

Exemptions Benefiting Canadian and Foreign Companies

While the exemptions are intended to help Canadian businesses, they also benefit some Chinese and U.S. manufacturers, although the value of trade affected remains unclear. Pellerin emphasized that these remissions provide meaningful, one-off relief for Canadian companies but are unlikely to significantly influence broader trade negotiations with the U.S.

Specific exemptions include U.S. products used in food and beverage packaging, which have been extended for another two months, and a new exemption for agricultural production. Exemptions covering American goods used in health care, public safety, and national security have also been extended.

A variety of companies have benefited from these exemptions. Pizza Trucks of Canada can now import American portable pizza ovens for food trucks without tariffs. Pivotech Doors can use a rolling steel door for a downtown Ottawa construction project duty-free. Even a professional artist in Alberta received an exemption for a U.S.-made commercial-grade nylon carpet with custom UV-reactive patterns.

Ongoing Trade Discussions

Champagne, U.S.-Trade Minister Dominic LeBlanc, and Canada’s top public servant Michael Sabia visited Washington this week to advance trade discussions, aiming to secure relief for Canadian industries while maintaining diplomatic ties with the U.S.

As the Liberal government navigates the complex landscape of international trade, the debate over exemptions highlights the tension between protecting domestic industries and facilitating access to necessary imports. With Canadian producers calling for stronger measures against both the U.S. and China, Ottawa faces the challenge of balancing immediate economic needs with long-term trade strategy.