Canada steelmakers pivot to domestic demand as U.S. tariffs reshape market

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Canada steelmakers pivot to domestic demand

Highlights

Canadian steel exports to the U.S. fell 60% in 2025 after tariffs rose to 50%, while domestic steel's market share increased to 51% from 41%.
Canada's federal government provided C$1 billion in loans for steel, aluminum, and copper industries in May and extended tariff rate quotas to combat foreign competition.
Tenaris invested C$306 million to expand Canadian production, while Algoma shifted focus to Canada-driven plate products amid 1,000 layoffs and mixed company results sector-wide.

Domestic shift gains traction

As reported by Reuters, Canadian steel companies have been redirecting their focus toward domestic buyers since U.S. President Donald Trump raised tariffs on imported steel to 50% in June 2025 from 25%. That shift is helping Prime Minister Mark Carney's broader effort to reduce Canada's economic dependence on the U.S., though it is being reinforced by government intervention and trade protection measures.

Canada had previously sent about 90% of its steel exports to the U.S., but those shipments fell 60% in 2025, according to the Canadian Steel Producers Association. At the same time, the share of steel used in Canada that is made domestically rose to 51% in 2025 from 41% in 2024, while the import share dropped to 49% from 59%, based on United Steelworkers calculations using World Steel Data and Canada's steel import figures.

Canadian steel demand is estimated to have grown about 2.7% in 2025 and is projected to rise a further 0.9% in 2026, according to an OECD report published in July. David Fritz of Alberta-based Supreme Steel said more Canadian companies are now competing for the domestic market, leaving less room for foreign steelmakers, and added that a pipeline of projects supports a positive outlook for fabricated steel in Canada.

Projects and policy support sector outlook

The improvement is most visible in western Canada, where large industrial developments, including a 1.2 gigawatt data center in Saskatchewan, are under construction. Carney has also said that a new oil pipeline to the Pacific Coast would increase steel demand, adding to support from infrastructure, energy and construction activity.

In May, the federal government announced C$1 billion in loans for the steel, aluminum and copper industries to provide working capital during the tariff shock. Ottawa also extended its tariff rate quota on foreign steel imports to limit dumping, a step seen as important because Canadian producers would struggle to compete against lower-cost supply from countries such as China and South Korea amid global overcapacity.

Company results across the sector remain mixed. Cleveland-Cliffs, which bought Stelco in 2024, has warned of strong international competition for galvanized steel from its Hamilton, Ontario, plant, even as demand for its hot-rolled steel produced elsewhere in Canada supports improved guidance for the second half of 2026; the company is due to report results on October 19. Tenaris said it recently invested C$306 million to expand Canadian production for domestic customers, while Algoma, despite announcing 1,000 layoffs in Ontario in December, has pointed to stronger local demand from infrastructure, construction and defence as its Canada-focused plate strategy gains traction.

Marty Warren, head of the Canadian branch of United Steelworkers, said the industry is turning around but needs a deeper replacement of imported steel with domestic output to secure a broader revival. Canada's finance ministry said the sector remains exposed to tariffs, and that policies including buying Canadian steel for infrastructure projects are intended to strengthen investment and demand.

In our earlier article on Mycron Steel Bhd’s withdrawal of its legal challenge over the removal of anti-dumping duties, we explained that the company dropped its judicial review after what it called constructive discussions, not because of a court ruling. We also noted that Malaysia’s decision to abolish duties on certain cold-rolled steel imports from South Korea and Vietnam shifted the sector’s focus toward the commercial fallout—price competition and supply pressure in the local market.

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