The US dollar against the Canadian dollar rose by 0.2%, as Canada considers raising tariffs to protect the steel and aluminum industries

On Thursday local time, the US dollar against the Canadian dollar narrowed its intraday gains to 0.2%. Canada stated that if trade negotiations with the Trump administration become stalled, it will raise tariffs on US steel and aluminum products as early as July 21.

According to a statement released on Thursday, the Canadian government indicated that it will adjust the current countervailing tariffs on steel and aluminum products on July 21 to align with the progress of the broader trade arrangements with the United States. The statement also noted that the Canadian government will introduce new regulations for federal projects, restricting these projects to use only steel and aluminum produced in Canada or from "reliable trading partner countries."

Canada will also establish new "tariff quotas" to limit steel imports from countries that have not signed trade agreements with Canada and plans to launch a new round of tariff measures in the coming weeks to address the risk of "steel dumping." Canadian Prime Minister Carney and other officials are concerned that the Trump administration's 50% tariff on steel will lead global steel producers to reroute their products to Canada.

On Thursday, Carney announced this series of measures in Ottawa alongside Cabinet Ministers Dominic LeBlanc and Mélanie Joly. Carney stated that he has been "relatively frequently" communicating with US President Trump. LeBlanc added that he has been in dialogue with US Secretary of Commerce Lutnick and will speak with US Trade Representative Greer on Friday.

Carney said at the press conference:

"We will certainly continue these negotiations in good faith. At the same time, we must strengthen our own capabilities to protect Canadian workers and businesses from the current unfair US tariffs."

"These new 'tariff quotas' are not a request from the US side in the negotiations, but rather a consequence of US actions."

Currently, the US imposes a 50% tariff on foreign steel and aluminum products, while Canada has imposed a 25% countervailing tariff on US-produced steel and aluminum. The two countries are currently negotiating a trade agreement, with an initial deadline set for mid-July.

When asked if Canada would be willing to accept some US tariffs as part of an agreement, Carney responded that true free trade is in the best interest of both countries. "This is a negotiation. If it is beneficial for Canada, we will sign; if not, we will not sign."

Following the news, Algoma Steel Group Inc. saw its stock price in Toronto rise nearly 8%, reaching a new high since March 5 of this year