Canada has unveiled a new initiative aimed at bolstering its steel and lumber industries, a move designed to navigate through challenging trade dynamics with the United States. Prime Minister Mark Carney announced these plans during a recent press conference, emphasizing the government’s commitment to not only support local workers but also to create a more resilient domestic market.
In response to ongoing tariffs imposed by the U.S., Canada will implement significant reductions on steel import quotas from countries lacking a free trade agreement (FTA). Beginning in 2024, these quotas will drop from 50 percent to 20 percent. For countries with an FTA, the quota will be limited to 75 percent, a strategy intended to protect Canadian industries from unfair competition. Notably, the measures will not affect trade relations with the U.S. and Mexico, which are governed by the United States-Canada-Mexico Agreement (USMCA).
This move is accompanied by a comprehensive 25 percent tariff on targeted imported steel-derivative products, alongside enhanced border measures to prevent steel dumping. These actions are part of a broader strategy to safeguard the domestic steel market while supporting over 23,000 jobs directly linked to this vital sector, which contributes more than CAD 4 billion (approximately USD 2.8 billion) to Canada’s gross domestic product (GDP).
The Canadian government is concerned about its heavily skewed trade relationship with the U.S., which accounts for over 75 percent of Canadian exports. Carney highlighted the vulnerability created by such dependence, particularly in key sectors like lumber and aluminum, where 90 percent of exports are bound for a single market.
To further reinforce this initiative, Ottawa plans to collaborate with railway companies to reduce inter-provincial freight rates for Canadian steel and lumber by 50 percent, making transportation more affordable and efficient. This strategic move aims to facilitate the use of domestically produced materials in homebuilding and construction projects.
The announcement comes at a time of heightened tension in U.S.-Canada trade relations, particularly following the cessation of trade talks after controversial advertisements aired in the U.S., which criticized Trump’s tariffs. Nevertheless, Carney remains optimistic about potential reconvening discussions and expressed a willingness to engage with U.S. officials during upcoming events.
As Canada positions itself to strengthen its economy amid global trade challenges, the government’s proactive measures signal a determination to enhance local industries, protect jobs, and reduce dependency on external markets.
#BusinessNews #PoliticsNews