Canada stays open to de-escalation but keeps tariff options on the table as PM Mark Carney and President Trump discuss resolving the steel and aluminium trade dispute.

Canada remains open to de-escalation but is keeping tariff options available as Prime Minister Mark Carney and President Donald Trump engage in talks to resolve the steel and aluminium trade dispute.

The Department of Finance Canada, in a news release on 24 June 2025, highlighted recent developments discussed by Deputy Minister Chris Forbes during a 23 June 2025 briefing with industry and labour stakeholders.

At the 23 June briefing, Deputy Minister Forbes provided an overview of the work to respond to the unjustified U.S. tariffs, as well as the ongoing discussions between Prime Minister Carney and President Trump. This includes the meeting at the G7 Leaders’ Summit in Kananaskis, Alberta, last week, where both leaders agreed to pursue negotiations toward a deal on a new economic and security relationship between Canada and the US>

The Deputy Minister also outlined the measures announced last week to support and protect Canada’s steel and aluminium workers and industries. The government will adjust its existing counter-tariffs on steel and aluminium products on 21 July 2025, to levels consistent with progress that has been made in the broader trading arrangement with the US.

The Deputy Minister reiterated that the government will also limit access to federal procurements to suppliers from Canada and reliable trading partners that provide reciprocal access, establish new tariff rate quotas to stabilize the domestic market and prevent harmful trade diversion of steel products as the result of US actions, create government-stakeholder task forces to better support the steel aluminum industries and their workers, and adopt additional tariff measures on the basis of “country of melt and pour” for steel and “country of smelt and cast” for aluminum over the coming weeks to address overcapacity and unfair trade in these sectors.

The trade tensions between the US and Canada escalated following Trump’s announcement of a 25% tariff on Canadian imports (30 January 2025) and a 10% baseline tariff on all imports, including Canada (2 April 2025).

In retaliation, Canada imposed 25% tariffs on CAD 12.6 billion worth of US steel and CAD 3 billion worth of aluminium on 31 March 2025. On 30 May 2025, Trump announced a doubling of tariffs on imported steel and aluminium to 50%, effective 4 June 2025.

In response, Canadian Prime Minister Carney warned on 19 June 2025 that further counter-tariffs on US steel and aluminium would be imposed if a trade agreement isn’t reached within 30 days.

On 16 June 2025, Carney announced that he and Trump had reached an agreement to aim for finalising a new economic and security deal by 21 July 2025.

However, on 27 June, Trump criticised Canada’s proposed 3% digital services tax, calling it a “blatant attack on the US” and labelling Canada as a “difficult country to trade with.”

On 29 June, he threatened new tariffs on Canadian goods within a week and announced a halt to all trade talks unless Canada dropped the tax, escalating tensions between the two nations. This followed after Canada proposed a retroactive 3% digital services tax on revenue from Canadian users, targeting major US tech giants like Google, Amazon, Meta, and Apple.

In response, Canada abandoned its planned 3% digital services tax on US tech firms on 29 June, to restart stalled trade negotiations between Prime Minister Carney and President Trump.

As of now, the US will resume trade talks with Canada after it dropped its digital services tax on US tech firms, White House adviser Kevin Hassett confirmed. Prime Minister Carney also informed President Trump of the decision, which Trump hailed as a win for US tech companies.