US steel and aluminum tariffs and Canadian retaliatory tariffs now in effect

On March 12, 2025, the US imposed tariffs of 25% on Canadian steel and aluminum, including many derivative products. The same day, Canada announced its intention to enforce $29.8 billion in retaliatory tariffs. In this article, members of our Cross-Border Trade Law Task Force answer commonly asked questions about the steel and aluminum tariffs. 

What US tariffs on steel and aluminum imports were already in place? 

In 2018, the US enacted a 25% tariff on steel imports and a 10% tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962.¹ Section 232 provides President Trump with authority to adjust imports being brought into the US in quantities or under circumstances that threaten to impair national security. The tariffs were imposed based on a US Department of Commerce finding that steel and aluminum imports were considered to threaten or impair US national security. 

Multiple countries were exempt from the application of these tariffs, including Canada and Mexico, and other US trading partners such as Argentina, Australia, Brazil, Japan, South Korea, the European Union, Ukraine and the United Kingdom.²

What US steel and aluminum tariffs came into force on March 12? 

On February 10 and 11, President Trump signed two executive orders that collectively will result in 25% tariffs on raw, semi-processed, and derivative steel and aluminum imports into the US from any country, including Canada. These new tariffs came into effect on March 12. 

The renewed US tariff regime reinstates the “full” 25% tariff on steel imports and increases tariffs on aluminum imports to 25%. Key reforms include:³

• Withdrawing various exceptions and exemptions; 
• Expanding the universe of what is considered a derivative product subject to tariffs; 
• Applying strict “melted and poured” standards; and
• Cracking down on tariff misclassification and duty evasion schemes.

The new tariffs removed the exemptions previously made for trading partners like Canada, citing that these exemptions “inadvertently created loopholes that were exploited by China and others with excess steel and aluminum capacity, undermining the purpose of the exemptions.”⁴

What are derivative products and are they included in the tariffs?  

Tariffs on derivative products were first introduced in 2018 to expand tariffs on steel and aluminum to include articles made from steel and aluminum that have undergone additional processing or manufacturing.  

Effective March 12, 2025, the 25% tariff applies to imports of steel and aluminum articles into the US, as well as to imports of steel and aluminum derivative products, as identified in the annexes to the relevant presidential proclamations. These lists of derivative products are more expansive than the approach taken to derivatives in the past. The annexes capture a relatively broad range of further-processed or manufactured goods containing steel and aluminum.⁵

For some derivative products, the tariff will be assessed against the full value of the good and, for other products, the tariff will only be applied against the value of the steel or aluminum in the good.⁶

How are derivative products made from US steel and aluminum treated?

Derivative steel products that were processed in Canada (or another country) from steel or aluminum that was first melted and poured or smelted and cast in the US are excluded from the tariffs. In other words, if the steel in a product was “melted and poured” in the US, or the aluminum was smelted and cast in the US, then exported to Canada and made into a finished good, the tariffs would not apply.⁷

What countermeasures has Canada announced? 

The Government of Canada has imposed a 25% tariff on $29.8 billion worth of US imports in response to the steel and aluminum tariffs, effective March 13, 2025. The 25% tariffs apply to a wide range of goods, including US-made steel and aluminum and certain cast iron products. The list of goods subject to the new tariff is available here. Like previous tariffs, these tariffs only apply to goods originating from the US, which shall be considered as those goods eligible to be marked as a good of the US in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.

The 25% tariffs Canada imposed effective March 13 are in addition to the first round of goods subject to Canadian retaliatory measures on $30 billion of imports from the US (available here), in response to the US tariffs put in place effective March 4 (which were later paused for goods designated as Canadian origin and duty free under the Canada-United States-Mexico Agreement). Canada is also seeking views on a third round of tariffs on US goods. 

The provinces have also taken action. For example, on March 10, Ontario Premier Doug Ford introduced a 25% levy on electricity exports to Michigan, Minnesota and New York, though it was rolled back after discussions with US representatives.

Will Canada face higher tariffs on steel and aluminum compared to other countries?

Most of the US’s trading partners also face a 25% steel and aluminum tariff, except China which will now face a 45% tariff on its steel and aluminum, as the US had imposed a 20% duty previously.

The authors would like to thank Madeline Heinke, articling student, for her contribution to preparing this legal update.