The administration of Donald Trump is offering immediate tariff relief to Canadian and Mexican steel and aluminum companies if they commit to shifting future production capacity to the United States, escalating pressure on North American manufacturers to invest south of the border.
The new U.S. measure creates a formal process allowing eligible companies to seek exemptions or relief from current tariffs on metal exports, provided they present plans to expand or relocate production into the American market.
The move comes after more than a year of steep U.S. tariffs on Canadian steel and aluminum, with some duties reportedly reaching 50 per cent. The latest policy is being viewed by many in Canada as an aggressive attempt to redirect investment and jobs away from Canadian industry.
Trade lawyer William Pellerin said the policy reinforces a strategy where the United States benefits when competitors lose ground.
Canadian manufacturers say the tariffs have already caused layoffs, facility closures and growing uncertainty across the industrial sector.
The government of Canada is also trying to restart formal negotiations with Washington over sector-specific tariff relief after talks reportedly stalled last fall.
Mark Carney said the U.S. tariffs violate the terms of the Canada-United States-Mexico Agreement, which is scheduled for review in July. He said Canada is ready to begin detailed talks immediately if the United States is willing.
Industry leaders have questioned whether the American offer is realistic.
Jean Simard said relocating aluminum production would require billions in investment with no certainty about future metal prices, making the proposal economically impractical.
Catherine Cobden said Canadian steel plants already represent massive long-term investments that cannot simply be abandoned.
The announcement adds to a tense week in Canada-U.S. relations. Reports suggest Washington is seeking concessions from Ottawa before broader trade talks resume, while U.S. officials have also criticized Canadian provincial bans on American alcohol introduced in response to tariffs.
The dispute now sets the stage for a high-stakes summer as the North American trade pact comes up for review and both sides prepare for difficult negotiations over tariffs, market access and industrial competitiveness.