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Prepare for Canada’s revised steel import regime

Updated: July 22, 2025

On July 16, 2025, the Canadian government announced a revised steel import regime designed to protect the domestic steel industry from trade diversion and global oversupply.

The revised framework introduces new import quota limits, origin-based surtaxes, and procurement reforms that prioritize Canadian inputs. Measures will come into effect progressively with some introduced before the end of July, while others start August 1, 2025.

Stabilizing the market and reinforcing domestic production is the long-term policy goal, but Canadian importers will bear the immediate cost, complexity, and compliance pressure. Contact a BDO advisor to request assistance with your customs strategy and supply chain management.

Key measures and timelines

Tariff Rate Quotas (TRQ) for Non-Free Trade Agreement (FTA) countries

Effective August 1, Canada will cap the total volume of steel imports from countries without a FTA with Canada at 50% of 2024 import levels. Imports within this 50% quota will continue to enter at Most Favoured Nation (MFN) duty rates. Anything above the cap will face a 50% surtax at the time of import into Canada.

TRQs for FTA Countries (excluding the U.S. and Mexico)

Also, effective August 1, steel import volumes from FTA countries (such as the European Union and South Korea) will be capped at 100% of 2024 import levels. Steel imports within the quota will continue to enter at preferential or MFN duty rates. Imports that exceed these thresholds will trigger the same 50% surtax as non-FTA countries.

25% Surtax on Chinese melt and pour Steel

Prior to July 31, a 25% surtax will apply to any steel imports containing inputs melted and poured in China, regardless of further processing or shipping origin.

The federal government has also signaled its intent to revise the tariff remission framework, with a clear shift toward favouring Canadian-made steel and aluminum in downstream manufacturing.

What this means for Canadian importers

This newest action by the Canadian government appears to be a structural reset of the steel quota regime and not a temporary response. For Canadian steel importers, these revisions narrow sourcing options, raises the cost of non-domestic inputs, and reduces flexibility for transshipped or quota-free steel. Importers will need to act quickly to assess exposure, document origin, and adjust procurement strategies to mitigate the impact on their businesses.

What do you need to do?

Quantify Your 2024 baseline

Quotas are based on Canada’s total 2024 import volumes by HS code and origin. Importers need to understand how their current sourcing compares against those benchmarks.

Audit melt and pour origin

Steel with Chinese melt and pour inputs will trigger a 25% surtax. Review mill certifications and supplier declarations now. If documentation is missing, request it immediately.

Model the cost impact

Factor in potential 25% and 50% surtaxes when calculating landed costs and evaluating margin impact.

Review supply terms and delivery timing

Contracts and shipment schedules may need to be adjusted to stay within quota limits and avoid unexpected duty exposure.

Track policy updates

Future relief, if offered, may depend on your use of Canadian origin inputs. Monitor developments in remission policy and procurement guidance.

How can BDO help?

This revised steel quota regime is being fortified to protect Canada’s domestic steel industry, but importers will carry the adjustment burden both financially and operationally. If you rely on offshore steel, now is the time to tighten your documentation, revisit sourcing, and understand where you’re exposed.

BDO helps clients across all industries navigate trade shifts with quota modeling, origin audits, and import cost minimization. Contact Brian Morcombe or Charmaine Goddeeris to request assistance with your customs strategy and supply chain management.

Brian Morcombe

Partner, Indirect Tax Leader

Contact View bio

Charmaine Goddeeris

Director, Indirect Tax