Canada Targets U.S. Steel and Aluminum With Tariffs Up to 50%

The Sept. 8 countermeasures will cover $27.6 billion in U.S. imports and more than 300 steel and aluminum products and derivatives after trade negotiations between Canada and the United States broke down.

By Paul Ploumis
Published August 27, 2026

MONTREAL (Scrap Monster): Canada on Tuesday moved to impose up to 50% tariffs on a raft of U.S. goods, including hundreds of steel and aluminum products, following a breakdown of trade talks and heated tariff escalation between the two neighboring countries.

The countermeasures, which go into effect Sept. 8, will mirror the U.S. Section 338 and Section 232 tariffs, as well as cover $27.6 billion in imports including seafood, dairy products, flooring, kitchen appliances and lawnmowers, according to Canada's government. They also target more than 300 steel and aluminum products and derivatives.

U.S. steel and aluminum products that were previously subject to a 25% tariff will soon face a 50% rate as part of the countermeasures, according to Canada's government. Steel and aluminum derivative products will be subject to 25% tariffs.

Tariff Escalation Reverses Expectations for Lower Metals Duties

The move came as a surprise to metal industry experts. In the days leading up to the escalation, market research and consulting firm World Steel Dynamics anticipated the possibility of a reduced 25% tariff rate on steel and aluminum goods between the U.S. and Canada.

This would have been the 'first such exception' that the Trump administration has made with any country globally and could have opened the door for remediation with Mexico, South Korea, Japan and other key trading partners. However, the opposite happened.

Domestic steel and aluminum trade groups have largely supported the administration's aggressive enforcement of U.S. trade law in an effort to address alleged import dumping from China and bolster domestic metals production.

They have also expressed a need for an improved U.S.-Mexico-Canada Agreement, which the U.S. declined to renew in July. The current version of the deal remains in place through July 2036.

In a July 23 op-ed with Steel Market Update, Phillip Bell, president and CEO of the Steel Manufacturers Association, was optimistic about the U.S. decision not to extend the deal for an additional 16 years, saying it was a 'negotiating posture, not a trade collapse.' He also noted that it could pave the way for negotiations on improvements to the USMCA and possible bilateral agreements.

Section 338 Tariffs Took Effect Aug. 22

President Donald Trump last month signed three proclamations that would impose an additional 50% tariff against Canada's imports under the authority of Section 338, citing discriminatory treatment of U.S. commerce.

The Section 338 tariffs took effect Aug. 22 and applied to all covered goods regardless of whether they were part of the USMCA. They do not apply to goods already listed under Section 232.

Canada's Department of Finance on Tuesday said it had negotiated 'intensively and in good faith' with the United States toward a 'fair and comprehensive' trade agreement, but ultimately the new terms were not in the country's best interest, 'basically, asking too much of Canada, and offering too little in return.'

'Canada did not choose this trade conflict, but we need to respond to provide a level playing field to our businesses,' the agency said in a statement.

Canada Announces $7.5 Billion Support Package

In addition to the countermeasures, Canada's government introduced a $7.5 billion package of measures to support the country's workers and businesses affected by U.S. tariffs.

Trump took shots at Canada on Tuesday, saying on his Truth Social platform that the country has been 'ripping off' the U.S. for decades and has driven many American companies out of business.

He also made threats to enact a 50% tariff on all cars, trucks, automotive parts and steel imports from Canada, as well as to rename Lake Ontario to Lake America.

'I deal with many countries, and Canada is easily the most difficult and unreasonable,' he posted.

U.S. steel and aluminum trade groups were noticeably quiet following Canada's countermeasures Tuesday.

Courtesy: www.manufacturingdrive.com