Canada announces new trade measures to protect Canadian steel industry

On November 26, the Prime Minister’s Office announced trade measures aimed at stabilizing and repositioning Canada’s steel and lumber industries amid US trade actions and global overcapacity.¹ For steel, the announcement included measures to limit foreign steel imports by lowering tariff rate quotas (TRQs); enacting a 25% global tariff on steel derivatives; ending the US remission order available for steel imports used in manufacturing, food and beverage packaging, and agriculture in January 2026; and enhancing the Canada Border Services Agency’s (CBSA) ability to enforce surtaxes on steel.

Reduced tariff rate quotas (TRQs) on steel

Beginning December 26, 2025, Canada will reduce the TRQs for steel imports that were originally established by the Order Imposing a Surtax on the Importation of Certain Steel Goods, which came into force on June 27, 2025.² TRQs are limits set by the government on quantities of imported steel products (expressed in tons) that can enter Canada each quarter without incurring a significant surtax of 50%. As a result, by lowering the TRQ, less imported steel can enter Canada without application of the surtax.  

Under the new TRQ measures, 

• The quota for tariff-free steel imports from countries without a free trade agreement (FTA) with Canada will be cut from 50% to 20% of 2024 levels.
• For FTA partners other than those in the Canada–United States–Mexico Agreement (CUSMA), the quota will decrease from 100% to 75% of 2024 levels. CUSMA partners will continue to benefit from their existing exemptions.

25% global tariff on steel derivative imports

Effective December 26, 2025, Canada will impose a 25% tariff on the full value of specified steel derivative imports, regardless of the country of origin. Until now, Canada has not widely surtaxed steel derivatives, while in March 2025 the US introduced tariffs on an expansive list of steel derivatives.³

This global tariff will apply to a range of derivative items where steel content makes up a significant portion of the product’s value. A “derivative” tends to include those products that are made from steel and have undergone additional processing or manufacturing. 

While the complete list of harmonized (HS) codes has yet to be released, the product categories identified in the backgrounder include: 

• certain shapes of iron or non-alloy steel, 
• fasteners, 
• wire, ropes and cables, 
• chains, 
• doors and windows,
• metal-frame seating, 
• selected metal furniture, 
• steel and iron cloth or netting, 
• prefabricated structures such as buildings, bridges, and wind towers. 

The complete list of HS Codes, as well as details on how the tariff will be applied,⁴ is expected to be released shortly. 

Remission on US steel for manufacturing expires January 31, 2026

Various forms of relief have been available to Canadian companies importing products subject to Canadian tariffs on US goods, as set out in our publication here. The United States Surtax Remission Order (the US Remission) provides remission to Canadian organizations and companies importing products for specific purposes, including for health care, public health, public safety and national safety, and for use in manufacturing, processing, food and beverage packaging, or agriculture imposed by virtue of the US Surtax Order (Steel and Aluminum 2025), the US Surtax Remission Order (Motor Vehicles 2025) and the US Surtax Order (2025-1) (no longer in effect).⁵

The Prime Minister’s announcement sets out that the US Remission for manufacturing, processing, food and beverage packaging or agricultural production will no longer be available to refund surtaxes paid on steel imports as of January 31, 2026. 

While the order setting the expiration of the US Remission has not been released, importers will likely still be able to retroactively apply for remission of surtaxes paid for those steel imports if they were paid before January 31, 2026, and were eligible for the US Remission. 

Based on the announcement, the portions of the US Remission on steel products imported for the purposes of public health, public safety and national security and health care, will likely still be available, as well as for steel inputs used in autos, auto parts, and aerospace. 

Strengthened CBSA enforcement of steel surtaxes

The Prime Minister’s announcement emphasized that enforcement of steel surtaxes is set to intensify through several measures. A dedicated CBSA steel trade compliance team will oversee enforcement efforts, while an enhanced Border Watch online portal will make it easier to report and investigate potential violations. The CBSA, in collaboration with the Canadian Steel Producers Association, will also hold regular technical workshops to ensure industry alignment on product characteristics and best practices. In addition, the CBSA’s Market Watch Unit will provide more frequent and timely updates to normal values for steel products. 

The Buy Canadian Policy and steel 

Lastly, the Prime Minister’s announcement highlighted the role that the federal government’s “Buy Canadian Policy” will play in promoting the Canadian steel industry. The Buy Canadian Policy will prioritize Canadian materials in contracts over $25 million and across federal grants and contributions programs, including infrastructure.  While suppliers need not be Canadian, qualifying procurements must use Canadian steel, aluminum, and softwood lumber above a $250,000 value threshold. More on the Buy Canadian Policy can be found in our publication here.