The Canadian government is facing criticism for excluding certain Chinese and American steel and aluminum imports from retaliatory tariffs. A recent order-in-council reveals that Ottawa has granted exemptions to numerous Canadian companies, allowing them to avoid paying tariffs on specific products that are deemed essential due to limited availability or existing contractual obligations.
The Canadian Steel Producers Association has expressed disappointment over the broad exemptions granted to U.S. producers for an additional two months, while Canadian producers continue to face barriers in accessing the U.S. market. The association’s CEO, Catherine Cobden, described the decision as “inconceivable,” particularly concerning the exemptions for Chinese steel imports that Canadian producers argue unfairly compete in the marketplace.
Calls from the steel industry urging Ottawa to take a stronger stance against China’s alleged unfair trade practices have intensified. Currently, Canada imposes a 25% tariff on Chinese steel and aluminum. Cobden has urged the government to increase the 25% retaliatory tariff on American steel to match the 50% tariff imposed by U.S. President Donald Trump on Canadian steel.
In response to Ontario Premier Doug Ford’s request for retaliatory measures against the U.S., Prime Minister Mark Carney has indicated a reluctance to escalate tensions at this time. Carney emphasized ongoing negotiations with the Trump administration to secure relief for key sectors, including aluminum, steel, and energy.
Finance Minister François-Philippe Champagne defended the exemptions as a measure to protect Canadian workers and families from adverse effects of countermeasures. International trade lawyer William Pellerin highlighted the significance of the exemptions in enabling Canadian manufacturers to import foreign steel or aluminum without incurring tariffs, thereby supporting competitiveness and cost-effectiveness.
While the exemptions benefit Canadian companies, they also aid some Chinese and American manufacturers. The exact value of the trade affected remains undisclosed. Pellerin noted that while the exemptions offer meaningful relief to Canadian companies, they are unlikely to significantly impact broader negotiations with the U.S.
Further exemptions have been granted for U.S. products used in food and beverage packaging and agricultural production, with extensions for goods related to health care, public safety, and national security. Specific companies, such as Pizza Trucks of Canada, Pivotech Doors, and a professional artist in Alberta, have received exemptions for importing specialized goods without tariffs.
Government officials, including Champagne, U.S. Trade Minister Dominic LeBlanc, and top Canadian public servant Michael Sabia, have been engaged in discussions in Washington to advance trade talks.