The U.S. initially set a 25% tariff on these metals earlier this year but recently doubled it to 50%, affecting all foreign suppliers but hitting Canada hardest since it’s the largest exporter of steel and aluminum to the U.S.

Earlier this year, Canada introduced retaliatory tariffs, but many were lifted shortly after due to concerns over rising costs for Canadian consumers. Despite having campaigned on a platform to counter U.S. tariffs through retaliation, the Prime Minister stated that Canada would not immediately respond to the new increase.

He said the government is engaged in intensive talks while preparing potential countermeasures should negotiations fail. Meanwhile, some provincial leaders and prominent groups are urging immediate retaliation. They argue the situation threatens thousands of jobs in steel and aluminum sectors, along with many related industries.

Labor and business organizations, typically not united, have joined forces to call for government action to protect jobs and invest in key industries. They are also pushing for additional measures like improved employment insurance and mandates to prioritize Canadian steel in national projects.

There is a notable contrast in approach compared to previous leadership, which acted swiftly to impose tariffs in past trade disputes. One provincial leader had recently imposed a surcharge on electricity exports to the U.S. but withdrew it following threats of tariff increases.

Industry leaders are also calling for Canada to address unfair trade practices from other countries that flood the market with cheap steel, urging protective tariffs under existing trade laws.

Analysts warn that many U.S. steel imports into Canada remain exempt from tariffs, which complicates the trade balance. Meanwhile, higher tariffs in the U.S. have already led to price increases, which could fuel inflation by making steel-containing products more expensive for American consumers.

A high-ranking U.S. official recently suggested that the current policy aims not only to lower trade barriers but to reduce certain imports altogether, potentially making negotiations more difficult.

In Parliament, opposition parties criticised the government for not securing a resolution despite campaign promises to counter the tariffs effectively. The situation is further complicated by the significant presence of mining and metal-processing plants in certain regions, adding political pressure on the minority government.

Although the U.S. President has said the Prime Minister’s arguments won’t change his stance on tariffs, the Prime Minister insists any agreement will require the U.S. to remove these levies on Canada.