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| US Tariff Canada and Mexico |
US Tariff Hike Escalates Trade Tensions with Canada and Steel Industry Implications
On August 1, 2025, US President Donald Trump raised tariffs from 25% to 35% on Canadian goods not covered by the USMCA agreement. This tariff increase affects multiple sectors, including steel, aluminum, lumber, and automobiles. The US also introduced a 40% transshipment duty on goods rerouted through third countries to avoid tariffs. This move significantly heightens trade friction between the two countries and disrupts supply chains in the North American steel market.
Canada’s Response and Industry Measures to Mitigate Tariff Impact
Canadian Prime Minister Mark Carney expressed disappointment but committed to strengthening Canada’s industrial competitiveness. Canada plans to protect jobs and diversify export markets while investing in local production. Ontario Premier Doug Ford urged Ottawa to impose retaliatory tariffs of up to 50% on American steel and aluminum imports. Meanwhile, Canada tightened tariff quotas on steel imports and revised procurement policies to support the domestic steel industry's transition.
Mexico’s Extended Deadline and Future Trade Prospects
While Canada faces increased tariffs, the US granted Mexico an additional 90 days to negotiate terms to avoid a 30% tariff starting August 1. Mexico currently pays a 25% duty on non-compliant exports. This staggered approach reflects differing US trade strategies in North America. As a result, steel producers and traders must navigate evolving tariffs and regulatory frameworks amid ongoing USMCA renegotiations.
ScrapInsight Commentary
The US tariff increase on Canadian steel exacerbates supply chain risks and pressures prices upward. Retaliatory measures and policy shifts in Canada will shape regional steel trade resilience. Meanwhile, Mexico’s extended negotiation period signals varied US trade enforcement, complicating North American market forecasts.
