Ottawa introduces new industry support
Canadian Prime Minister Mark Carney announced new measures on Wednesday to support the steel and lumber sectors following steep tariffs imposed by the United States. U.S. President Donald Trump recently raised duties to 50 percent on steel and 45 percent on softwood lumber, marking another escalation in the long-running trade dispute.
Carney said the era of deepening integration between the two economies has come to an end. He noted that Canada’s reliance on the American market leaves its most strategic exports exposed to sudden policy changes.
“Last year, more than 75 percent of our exports went to the United States. 90 percent of our lumber exports, 90 percent of our aluminum exports, and 90 percent of our steel exports, all bound for a single market,” Carney said. “We must protect our workers and industries who are most exposed to U.S. tariffs.”
Quota cuts and financial guarantees
One of the central moves in Ottawa’s response is to reduce the quota on steel imports from non-free-trade countries. The limit will fall from 50 percent to 20 percent of 2024 levels, a step aimed at strengthening domestic producers.
The federal government will also provide an additional 500 million Canadian dollars (US$356 million) in loan guarantees to the softwood lumber sector. This support comes alongside incentives to encourage homebuilding firms to favor Canadian material inputs.
Freight subsidies to build internal demand
Beginning next spring, the federal government will subsidize rail freight for steel and lumber moving between provinces. The policy is designed to channel trade activity inward and reduce the economic impact of losing access to U.S. buyers.
“We will make it more affordable to transport Canadian steel and lumber across the country by cutting freight rates,” Carney said. The announcement acknowledges that domestic logistics costs are often a barrier to competing internally.
Diplomatic tensions and future talks
Relations with Washington remain strained. The United States halted trade discussions after an advertising campaign aired in U.S. markets criticizing tariff policy. The ads referenced a speech by former U.S. president Ronald Reagan, prompting the White House to withdraw from dialogue.
Carney said he remains open to talks and confirmed he plans to meet President Trump during his visit to Washington on December 5 for the FIFA World Cup 2026 draw. “We are ready to re-engage on those talks when the United States wants to re-engage,” he said.
