US-Canada tariff dispute further restricts North American steel trade

Steel trading opportunities between the United States and Canada are set to narrow further following another escalation in tariffs between the two countries, according to MEPS International.

Canada increased tariffs on most US-origin steel products from 25% to 50% on September 8, as part of retaliatory measures covering CAD27.6 billion worth of annual US imports. The measures follow 50% US tariffs and also affect several steel-consuming sectors, including agricultural equipment, appliances and electronics.

Structural steel faces additional pressure

Structural steel products, including beams imported from Canada, have also been brought under additional US tariffs. According to MEPS, these duties will be applied on top of existing 50% Section 232 steel tariffs, substantially increasing the cost of Canadian material entering the US.

The situation is particularly challenging for the Canadian market because the country has no domestic integrated producer of steel beams. Canada's decision to impose a 50% tariff on US-origin beams therefore leaves distributors and construction companies looking to more distant suppliers. MEPS reported that Canadian beam prices remained at record levels in September amid tight availability.

Steel buyers close to the US-Canada border are also increasingly having to seek alternative suppliers, resulting in higher procurement costs and longer delivery times.

Trade data already show a significant decline in cross-border steel flows. US imports of Canadian flat and long carbon and alloy steel products fell almost 52% year on year to 953,962 tonnes in the first half of 2026. This followed a decline of almost 20% during the same period in 2025.

US steel exports to Canada have also decreased. Volumes fell 17.4% year on year to 1.31 million tonnes between January and July 2026, after dropping 28.1% to 2.55 million tonnes during 2025.

South Korea has meanwhile overtaken Canada as the largest supplier of flat and long carbon steel products to the US, although Canada remains the second-largest source. The US continues to be Canada's largest foreign steel supplier despite the decline in trade.

MEPS said the continuing dispute is also changing wider trade relationships in North America. The US is pursuing bilateral discussions with Mexico, while Canada is seeking closer trade ties with the European Union as it looks to reduce its dependence on the US market.

Source: MEPS, Photo: Fotolia