You’re listening to Canada Tariff News and Tracker, where we break down the fast-moving world of tariffs, trade, and politics between Canada and the United States under President Donald Trump’s new term.

According to Steel Market Update, the big headline for Canada right now is the return of U.S. Section 232 tariffs on Canadian steel and aluminum in 2025, a move that has sharply reduced Canadian metal exports to the U.S. and reignited trade tensions across the border. The publication reports that when these tariffs were reimposed on Canadian and Mexican steel, U.S. imports dropped by more than 1.4 million tons in the first nine months of 2025, almost exactly matching an increase in American raw steel production. In other words, Washington is again using tariffs to pull production back from Canadian mills into U.S. plants.

At the same time, Canada is pushing back with its own measures. Trade compliance firm GHY International reports that Ottawa will impose a 25 percent tariff on a range of steel derivative products starting December 26, 2025. These duties cover items such as steel structures, wire, chain, fasteners, furniture components, and prefabricated buildings, signaling that Canada is willing to tax not just raw steel but higher-value products moving through its market.

This tariff tit-for-tat is unfolding just as the United States–Mexico–Canada Agreement, or USMCA, heads toward its first formal joint review in 2026. The American Prospect reports that Prime Minister Mark Carney is trying to preserve the agreement while facing intense pressure from President Trump on two Canadian “third rails”: supply management in dairy and Canada’s role in North American auto production. Trump advisers are again eyeing Canada’s high over-quota tariffs on imported milk and eggs and pushing for more reshoring of auto and parts production from Canadian facilities back into the U.S.

According to The American Prospect, many products within USMCA remain exempt from tariffs or have recently been declared exempt by the president, but the threat hanging over Ottawa is clear: if Trump doesn’t get deeper concessions on dairy, autos, and market access, he could use tariffs—or even the possibility of quitting the agreement—as leverage.

These disputes are spilling into specific sectors. The Drinks Business reports that a political standoff has left Canada with millions of dollars’ worth of unsold U.S. alcohol after Trump acted against Canadian measures earlier in the year. Exports of American spirits to Canada are said to be down about 85 percent since the White House move, and talks to resolve the issue were cut off after Ontario aired anti-tariff ads on U.S. networks. Only two Canadian provinces are still selling U.S. alcohol in government-controlled outlets, turning a niche trade spat into a symbol of broader tariff tensions.

Meanwhile, trade watchers note that talk of a “Fortress North America” common external tariff has not matched reality. Steel Market Update argues that Canada’s relatively loose tariff-rate quotas and its wide web of free trade agreements still allow low-priced steel from countries like Japan, South Korea, Vietnam, and the European Union to land in Canada, then potentially move into the U.S. market. U.S. producers say that unless tariffs also hit some Canadian exports, Canadian mills will remain an export platform aimed squarely at American buyers.

For Canadian businesses and consumers, all of this translates into a more volatile environment. Supply chains that once flowed smoothly under NAFTA and early USMCA years now run through a thicket of shifting tariffs, exemptions, and political bargaining. From steelmakers in Hamilton and aluminum smelters in Quebec, to dairy farmers in Ontario and auto parts plants in Windsor, the question is how much more leverage Washington will try to extract, and how far Ottawa is prepared to go in retaliation.

That’s it for this edition of Canada Tariff News and Tracker. Thanks for tuning in, and don’t forget to subscribe so you never miss an update on the tariffs shaping Canada’s economy and its relationship with the United States.

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