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Photo by Peter Power/Postmedia filesA tentative deal being negotiated in Washington, D.C., proposes that Canadian steel mills will face tariffs and quotas on their exports to the United States, but U.S. steel producers won’t face any such barriers in Canada, according to sources who were briefed on the matter.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe proposed deal will allow Canadian companies to export four million tonnes of steel to the U.S. per year at a 25 per cent tariff rate, but any steel in excess of that volume will face a 50 per cent levy, say sources who were granted anonymity because of the sensitivity of the matter.It’s part of a broader trade package being negotiated between the U.S. and Canada after U.S. President Donald Trump threatened to invoke new 50 per cent tariffs on approximately $20-billion worth of Canadian products, including hockey sticks, dairy products and many other items.Breaking business news, incisive views, must-reads and market signals. 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Please try againThose tariffs, under Section 338 of the Tariff Act of 1930, were scheduled to take effect on Wednesday, but have been postponed until 12:01 a.m. Saturday pending negotiations.A spokesperson for the Prime Minister’s Office said the negotiating team is still in Washington, D.C., and continues to work on the deal.“As collaborative efforts with the United States towards a finalized agreement remain ongoing, we will not comment further,” the spokesperson said.The proposed deal will lower U.S. tariffs for Canadian steel companies while Canada will drop its countertariffs on U.S. steel, but it arrives as domestic producers are trying to expand their market share here.Separately, the Canadian government may also impose new restrictions on foreign steel from other countries, including a 50 per cent tariff on steel imports from countries that lack a free-trade agreement with Canada, according to the sources.Countries that have signed a free-trade agreement with Canada could ship 50 per cent of the volume they exported here in 2024 at preferential rates, but face a 50 per cent tariff on steel in excess of that volume, the sources said.The current policy, introduced last year, limits non-free-trade countries to shipping 20 per cent of the volume they shipped in 2024, above which they face a 50 per cent tariff. Free-trade countries are limited to 75 per cent of 2024 volumes, above which the 50 per cent tariff kicks in.Canada had imposed a 25 per cent tariff on selected U.S. steel products in March 2025 after the U.S. first imposed 25 per cent tariffs on Canadian steel products.The U.S. in June 2025 raised its tariffs on Canadian steel to 50 per cent, leading to lower sales and layoffs across the domestic steel industry.Historically, the U.S. has been an important market for Canadian steel mills and vice versa, although Canada may be more reliant on the U.S.The government estimates Canadian steel mills produced around 12 million tonnes in 2024, with the U.S. being the biggest end market at 6.1 million tonnes. Canada used 5.5 million tonnes of that total, while the rest of the world accounted for the remaining 0.4 million tonnes.Overall, Canada used about 13.8 million tonnes in 2024. That means its mills could theoretically sell more product into the domestic market, but some analysts have said the products made here do not always match the demand, so some imports are needed.Nonetheless, Prime Minister Mark Carney has said Canada is too reliant on imports and drafted policies to help producers here boost their domestic sales.Historically, Canada has been an important market for U.S. steel producers, which shipped an estimated 3.3 million tonnes here in 2024, while other countries shipped about five million tonnes.At least one Canadian steel producer criticized the deal because U.S. producers could send steel shipments here without tariffs or quotas while Canadian producers face a quota and tariff in the U.S.“This is the epitome of unfair,” he said. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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