Canada eyes ‘Buy Canadian’ policy as tariff dispute with US puts aluminium and steel on the line

With the United States slapping a steep 50 per cent tariff on Canadian steel and aluminium imports, Ottawa is now fast-tracking a self-sufficient economic response potent to reshape North America’s metals supply chain. At the centre of this pivot is a proposed ‘Buy Canadian’ policy, an industrial safeguard designed to protect Canadian producers and preserve jobs by mandating the use of domestic metal in government procurement contracts.

Image for representational purposes only (Source: https://policyoptions.irpp.org/)

Industry Minister Mélanie Joly confirmed this week that the government is actively considering procurement requirements for both infrastructure and defence projects that would prioritise Canadian-made metals. “These decisions are being taken as we speak,” Joly said, emphasising the policy’s fast-track implementation, adding, “I’m convinced that this will help create greater demand within Canada and therefore protect jobs.”

The move mirrors the United States’ own protectionist measures under Donald Trump’s first term (2018), where “Buy American, Hire American” became a key plank of industrial policy. However, with President Trump now doubling down on metal tariffs as part of his 2025 economic agenda, Canada is fighting fire with fire.

Even in 2024, Canada remained the primary source for the US aluminium value chain. According to USGS, the leading source of total aluminium imports to the US in 2024 was Canada (61 per cent). The country’s exports to the United States were unparalleled, as exporters like the United Arab Emirates (6 per cent) and Mexico (5 per cent) were left far behind. For crude metal and alloy imports, the leading sources in 2024 were again led by Canada (76 per cent), followed by the United Arab Emirates (10 per cent) and Argentina (5 per cent).

While for semi-fabricated products, again Canada (18 per cent) led, the Republic of Korea (15 per cent), and China, including Hong Kong (13 per cent) followed. For scrap, the leading exporters were the US’ two neighbours: Canada (58 per cent) and Mexico (32 per cent).

Losing ground in the US market

The new US tariff (starting with 25 per cent and then moving up the ladder with 50 per cent) regime has effectively restricted the border to Canadian metals. “The 50 per cent levy is basically shutting out Canadian producers from the US market,” earlier warned Marty Warren, national director for the United Steelworkers union in Canada. Alongside, he has informed, “We still need some short-term relief so the industry can keep its head above water.”