On 19 June 2025, the Canadian federal government announced a new round of trade measures in response to the US decision to double Section 232 tariffs on Canadian steel and aluminium to 50%. These actions are designed to shield domestic producers, respond proportionally to the US tariffs and prevent trade from being rerouted through third countries. While not entirely unexpected, the updates raise real compliance and planning challenges for businesses on both sides of the border. (For coverage of Canada’s digital services tax, see the trade alert dated 1 July 2025)
Canada will revise its existing retaliatory tariffs on US steel and aluminium, effective 21 July 2025. While full details are still pending, the Canadian government has signalled that this matter is active and evolving. Importers of US metals should review their tariff classifications and consider reviewing landed cost models. Relief tools such as remission orders or duty deferral programs may warrant a second look if exposures increase.
Starting 30 June, Canada has implemented a new procurement rule: if a country restricts Canadian firms from bidding on its public contracts, Canada will reciprocate. This move primarily targets the US federal market, where “Buy American” provisions continue to limit Canadian participation. Although this is not a customs issue, it is significant for businesses integrated into North American public sector supply chains or infrastructure projects.
To prevent Canada from becoming a transshipment point for third-country steel, the government is introducing tariff rate quotas (TRQs) on imports from nations without a free trade agreement (FTA) with Canada. The quotas will align with 2024 import volumes and apply retroactively. Volumes exceeding the threshold may face additional duties. Companies sourcing from countries such as China, Turkey or Vietnam should compare current imports against last year’s benchmarks.
Origin rules are tightening. Duties will now be determined based on where steel was melted and poured, or where aluminium was smelted and cast, not just where final processing occurred. This will affect goods that pass through multiple jurisdictions before reaching Canada. Importers and brokers should confirm that origin documentation includes these specific production stage details, even if the product otherwise qualifies under the Canada United States Mexico Agreement (CUSMA).
The federal government is establishing two task forces, one each for steel and aluminium, to monitor trade activity and pricing impacts. A CAD 10 billion loan program is also being launched for large businesses affected by the tariffs. While smaller firms may not benefit directly, the facility signals Ottawa’s intent to cushion the blow for major employers in the sector.
Canada’s new trade actions could raise costs or introduce compliance risks for businesses importing steel, aluminium or related products. Quotas, surtaxes and tighter origin rules make it essential to reassess your supply chain, particularly if you source from the US or non-FTA countries. It is a good time to review tariff exposure, confirm the robustness of origin documentation and consider available relief mechanisms.
Brian Morcombe
Charmaine Goddeeris
BDO in Canada
Updates to Retaliatory Tariffs
Canada will revise its existing retaliatory tariffs on US steel and aluminium, effective 21 July 2025. While full details are still pending, the Canadian government has signalled that this matter is active and evolving. Importers of US metals should review their tariff classifications and consider reviewing landed cost models. Relief tools such as remission orders or duty deferral programs may warrant a second look if exposures increase.
Reciprocal Procurement Measures
Starting 30 June, Canada has implemented a new procurement rule: if a country restricts Canadian firms from bidding on its public contracts, Canada will reciprocate. This move primarily targets the US federal market, where “Buy American” provisions continue to limit Canadian participation. Although this is not a customs issue, it is significant for businesses integrated into North American public sector supply chains or infrastructure projects.
New Quotas on Non-FTA Steel
To prevent Canada from becoming a transshipment point for third-country steel, the government is introducing tariff rate quotas (TRQs) on imports from nations without a free trade agreement (FTA) with Canada. The quotas will align with 2024 import volumes and apply retroactively. Volumes exceeding the threshold may face additional duties. Companies sourcing from countries such as China, Turkey or Vietnam should compare current imports against last year’s benchmarks.
Stricter Origin Requirements for Metals
Origin rules are tightening. Duties will now be determined based on where steel was melted and poured, or where aluminium was smelted and cast, not just where final processing occurred. This will affect goods that pass through multiple jurisdictions before reaching Canada. Importers and brokers should confirm that origin documentation includes these specific production stage details, even if the product otherwise qualifies under the Canada United States Mexico Agreement (CUSMA).
Support Measures for Industry
The federal government is establishing two task forces, one each for steel and aluminium, to monitor trade activity and pricing impacts. A CAD 10 billion loan program is also being launched for large businesses affected by the tariffs. While smaller firms may not benefit directly, the facility signals Ottawa’s intent to cushion the blow for major employers in the sector.
How BDO Can Help
Canada’s new trade actions could raise costs or introduce compliance risks for businesses importing steel, aluminium or related products. Quotas, surtaxes and tighter origin rules make it essential to reassess your supply chain, particularly if you source from the US or non-FTA countries. It is a good time to review tariff exposure, confirm the robustness of origin documentation and consider available relief mechanisms.Brian Morcombe
Charmaine Goddeeris
BDO in Canada