The decision by President Trump to impose a 25% import tariff on steel and aluminum products from all countries was first announced earlier this year, sparking widespread concern among global trade partners. As anticipated, the measure officially took effect on March 12, 2025, with the U.S. government citing the need to protect domestic producers and address trade imbalances. Not surprisingly, the tariffs have been met with swift backlash, particularly from Canada and the EU, which have taken immediate steps to retaliate.

Impacted goods

The new U.S. tariffs impose duty on a wide range of steel and aluminum products, including raw and processed steel, existing and new derivative steel products, and various aluminum goods such as primary aluminum and aluminum derivatives. These tariffs apply to both direct imports and goods processed in foreign trade zones.

Certain exemptions do exist, however. Steel and aluminum products that have been processed in another country but originally sourced from U.S.-melted and poured steel or U.S.-smelted and cast aluminum are not subject to the tariffs. These exemptions primarily apply to goods that meet U.S. origin requirements and were granted special trade status before the tariffs took effect.

For the full list of affected goods, see the recent U.S. Customs and Border Protection guidance on steel and aluminum imports.

Global response to the tariffs

The new tariffs sparked immediate reactions worldwide. The European Union announced its intent to introduce retaliatory tariffs totaling approximately USD$28 billion on various American exports, which will take effect in two stages on April 1 and April 13.

“Tariffs are taxes. They are bad for business, and worse for consumers,” said Ursula von der Leyen, President of the European Commission in a statement yesterday. “Nobody needs that–on both sides, neither in the European Union nor in the United States.”

Canada also moved quickly to counter the decision, imposing retaliatory duties of 25% on CAD$29.8 billion worth of U.S. imports, effective March 13, 2025. These duties target a range of goods, including steel, aluminum, consumer electronics, and sporting equipment.

Prime Minister-designate Mark Carney has reinforced Canada’s firm stance, stating that the country will not back down in the face of protectionist policies. “I am ready to sit down with President Trump at the appropriate time under a position where there is respect for Canadian sovereignty and we are working for a common approach, a much more comprehensive approach for trade,” he told reporters while touring a steel factory in Hamilton.

Economic implications

Canada's steel and aluminum industries are critical to both the domestic and North American economies, and analysts expect the consequences of these tariffs to be significant. Canada is the largest foreign supplier of steel to the U.S., exporting approximately 6 million metric tons annually, accounting for 11% of total U.S. steel imports. Canada also accounts for almost 60% of the aluminum used in the U.S., with Quebec alone producing the majority of that supply. Altogether, these exports support tens of thousands of Canadian jobs, particularly in Ontario and Quebec, and generate billions of dollars in economic activity.

Stock markets have reacted negatively to the tariffs, which threaten to increase costs for American companies that use these metals, such as automakers, construction firms and beverage makers that use cans.

What’s next?

As Canada continues to push back against tariffs, the situation remains highly fluid with Liberal Leader Mark Carney being sworn in with his new Cabinet tomorrow at Rideau Hall. We can expect a renewed approach in dealing with the White House as Federal Finance Minister Dominic Leblanc and Ontario Premier Doug Ford report on their meetings today in Washington D.C. to ease the current trade tensions between Canada and the U.S. In the interim, additional diplomatic efforts will continue on both sides of the border, all while Ambassador-designate Pete Hoekstra is before a Senate Committee today for his confirmation hearing.

Looking ahead, President Trump has announced that his administration will implement reciprocal tariffs—in addition to the long-threatened 10% tariff on energy products and 25% tariffs on other countries that impose tariffs against the United States—as soon as April 2.

Reciprocal tariffs may also be used to address perceived “unfair trade practices,” which may apply to Canada in retaliation for its digital service tax or other measures. Additional duties could be added to the current tariffs on non-USMCA origin Products of Canada (imposed by the U.S. against Canada on March 4), and on steel and aluminum. In any event, we expect that efforts efforts by Canadian officials to avoid this escalation will be the focus in the days and weeks ahead.

For assistance in determining how these changes will impact your organization, please contact the authors. Gowling WLG’s International Trade and Customs & Government Affairs teams continue to closely monitor these developments and are well-positioned to help you navigate the road ahead.