OTTAWA — The federal government’s recent moves to guard against cheap foreign steel and aluminum flooding the domestic market could help Canada secure an economic and security deal with the United States, Dominic LeBlanc said in a recent interview with The Logic.

“We went through that with the Americans in considerable detail, and we hope that those will be positive steps that will get us to an agreement,” said LeBlanc, the federal cabinet minister leading the Canada-U.S. trade file alongside Canadian Ambassador Kirsten Hillman.

LeBlanc spoke to The Logic last Friday, a few hours before U.S. President Donald Trump halted trade talks with Canada over Ottawa’s decision to implement the digital services tax that had been in the works for years. On Sunday, the federal Liberal government announced it would rescind Canada’s DST to keep the talks going.

Prime Minister Mark Carney said negotiations resumed Monday morning and that his government had already expected that dropping the DST would have been part of a larger deal. Carney and Trump are aiming to secure a new economic and security agreement by July 21.

There are several layers of U.S. tariffs on Canadian goods, but none as steep as the 50 per cent duties on steel and aluminum. The U.S. imported more of those metals from Canada than from any other country last year, and there have already been Canadian layoffs in both sectors. 

On June 19, Carney announced Canada would adjust its 25 per cent retaliatory tariffs on U.S. steel and aluminum products on July 21, depending on the state of the talks. Other measures announced that day, however, could have the added benefit of showing the Trump administration Canada is doing its part in the fight against steel overcapacity. Largely driven by China, global production overcapacity was expected to reach 573 million tonnes last year.

Canada imposed 25 per cent tariffs on Chinese steel and aluminum products last October, matching a move by the Biden administration. (It also brought in a 100 per cent tariff on Chinese-made electric vehicles, prompting China to retaliate with steep counter-tariffs on Canadian canola oil, canola meal, peas, seafood and pork.)

“Canada has been one of the first partners to step up with the United States, going back to the previous administration, on dealing with non-market economies—principally China, but not exclusively—that dump products like steel directly or indirectly in Canada,” said LeBlanc. “We are further along than most trading partners with the United States.”

That is something the Americans acknowledge in their conversations, LeBlanc added, and something he has reminded U.S. Commerce Secretary Howard Lutnick about as they negotiate a new Canada-U.S. relationship that, Canada argues, should bring an end to tariffs.

“If we want to work collaboratively to deal with the threat that these non-market economies represent to strategic sectors of both, it’s in the national security interest of the United States and Canada to do this together,” LeBlanc said he told Lutnick. “And we’ve been unequivocal on that. We have zero Chinese vehicles in Canada. Zero. So if you look at the national security interest of the United States and sectors they want to protect from exactly that kind of threat, there is no daylight between Canada and the United States.”

The Trump administration, however, thinks it sees some cracks. There are concerns—shared by Canada’s steel industry—that China and other countries circumvent tariffs by exporting metal to countries such as Canada in an unfinished state. Those shipments are not hit with Canada’s tariffs and make it harder for Canada’s steel industry to compete for domestic sales, which worsens the overcapacity issue. 

Trump gave that as one reason for restoring tariffs on all imports of aluminum and steel, removing an exemption Canada has had since 2019. Trump doubled those levies to 50 per cent in early June.

The June 19 announcement said Canada would soon adopt further trade measures for steel and aluminum to address overcapacity. Though it did not specify what they would be, the government said they would be applied based on the country of “melt and pour” for steel and the country of “smelt and cast” for aluminum—meaning where the metals truly originate.

Ottawa also set new tariff rate quotas for some steel imports from countries with which Canada does not have free trade pacts. That means any amount those countries ship to Canada above what they sent in 2024 will be hit with a 50 per cent surtax. The quotas do not apply to downstream products, and they will be reviewed in a month.

There is precedent for Trump linking action on steel and aluminum to a wider deal. The framework that Trump negotiated in May with British Prime Minister Keir Starmer says the U.K. “will work promptly to meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities.” While the U.S. still has 25 per cent tariffs on British steel and aluminum, it agreed to consider lowering the rate for a certain amount at a future date.

Canada’s steel industry says the measures Carney announced do not go far enough to curtail unfair trading practices that began before Trump launched his trade war. Still, LeBlanc was hopeful they will convince the U.S. that Canada is not part of the problem, saying the country has gone further on the issue than the U.K.

“We’re not simply mimicking the Americans. We have been doing stuff on our own in this area that we share with the Americans regularly, and I think is reassuring to them,” he said.

“The economic security of Canada and the United States are linked in that respect. The Americans talk about it that way, and so do we. That is an easy part of the conversation with the Americans.”