US and Canada Near Trade Deal to Adjust Steel Tariffs and Quotas

The United States and Canada are in the final stages of negotiations for a trade deal that would introduce a tariff-rate quota on Canadian steel imports. Under the proposed agreement, Canadian steel shipped to the US would incur a 25% tariff on volumes up to a set limit, with a full 50% duty applied to any excess.

This deal marks a significant attempt to mitigate the escalating tariff conflict that began in 2025 when the US imposed a 25% duty on Canadian steel and aluminum, which later doubled to 50%. In retaliation, Canada implemented its own measures, including reducing tariff-rate quotas on non-USMCA steel imports.

Negotiations, led by Canadian Trade Minister Dominic LeBlanc and US Trade Representative Jamieson Greer, have been intense, focusing primarily on steel, although aluminum tariffs are also under discussion. The proposed annual quota is suggested to be around 4 million metric tons, a figure that is contentious as it balances the protection of American producers with the access needs of Canadian exporters.

Additionally, there are discussions to reduce tariffs on Canadian-built vehicles from 25% to 15%, which would significantly benefit manufacturers reliant on cross-border supply chains. The deadline for finalizing this deal is August 22, after which a failure to reach an agreement would trigger the full 50% tariff on approximately $20 billion worth of Canadian goods.