On June 19, 2025, the Canadian federal government announced a new round of trade measures in response to the U.S. decision to double Section 232 tariffs on Canadian steel and aluminum to 50%. These actions are designed to shield domestic producers, respond proportionally to the U.S. tariffs, and prevent trade from being rerouted through third countries. While not entirely unexpected, the updates raise real compliance and planning challenges for businesses on both sides of the border.
Revised retaliatory tariffs on U.S. metals
Canada will revise its existing retaliatory tariffs on U.S. steel and aluminum, effective July 21, 2025. While full details are still pending, the Canadian government has signaled that this matter is active and evolving. Importers of U.S. metals should review their tariff classifications and consider reviewing landed cost models. Relief tools such as remission orders or duty deferral programs may warrant a second look if exposures increase.
Reciprocal procurement restrictions now in effect
Starting June 30, Canada has implemented a new procurement rule: if a country restricts Canadian firms from bidding on its public contracts, Canada will reciprocate. This move primarily targets the U.S. federal market, where “Buy American” provisions continue to limit Canadian participation. Although this isn’t a customs issue, it’s significant for businesses integrated into North American public sector supply chains or infrastructure projects.
Tariff rate quotas introduced on non-FTA steel
To prevent Canada from becoming a transshipment point for third country steel, the government is introducing tariff rate quotas (TRQs) on imports from nations without a free trade agreement with Canada. The quotas will align with 2024 import volumes and apply retroactively and. Volumes exceeding the threshold may face additional duties. Companies sourcing from countries such as China, Vietnam or Turkey should compare current imports against last year’s benchmarks.
Origin rules tighten for steel and aluminum imports
Origin rules are tightening. Duties will now be determined based on where steel was melted and poured, or where aluminum was smelted and cast, not just where final processing occurred. This will affect goods that pass through multiple jurisdictions before reaching Canada. Importers and brokers should confirm that origin documentation includes these specific production stage details, even if the product otherwise qualifies under CUSMA.
Federal support measures for affected industries
The federal government is establishing two task forces, one each for steel and aluminum, to monitor trade activity and pricing impacts. A $10 billion loan program is also being launched for large businesses affected by the tariffs. While smaller firms may not benefit directly, the facility signals Ottawa’s intent to cushion the blow for major employers in the sector.
How BDO can help
Canada’s new trade actions could raise costs or introduce compliance risks for businesses importing steel, aluminum, or related products. Quotas, surtaxes, and tighter origin rules make it essential to reassess your supply chain—particularly if you source from the U.S. or non-FTA countries. It’s a good time to contact your BDO advisor to review tariff exposure, confirm the robustness of origin documentation, and consider available relief mechanisms. We’re available to help you navigate these changes and minimize operational disruptions.
The information in this publication is current as of July 3, 2025.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.