No G20 repeat at G7: Canada warns of tariffs on US aluminium and steel amid faltering trade talks

Following a disappointing outcome at the G7 summit, Canada has signaled to adopt a tougher stance against the United States, as a renewed trade standoff threatens to unravel years of economic integration under the USMCA.

Initially, the G7 platform had reignited a hope for the cooperative spirit that led to the 2020 USMCA trade pact, often dubbed “NAFTA 2.0”, but eventually concluded without any resolution on escalating tariff tensions. As a result, Canada is preparing to implement further retaliatory measures against the US, responding to Washington’s planned 50 per cent tariff hike on Canadian goods scheduled to take effect on July 9, 2025.

At the heart of the dispute lies the inability of Canadian Prime Minister Mark Carney and US President Donald Trump to reconcile differences on border security and economic cooperation. However, the door to diplomacy has not fully closed. Both leaders have agreed to a 30-day negotiation window, with July 21 set as the cutoff date to determine whether retaliatory tariffs will be scaled up. The final tariff rate, Canada has clarified, will hinge on the tangible progress made in talks over the coming weeks.

Nonetheless, Ottawa has made it clear and loud that it will revise its 25 per cent retaliatory tariffs on the US aluminium and steel imports if no substantive deal is reached within the 30 days. Canada had first imposed the 25 per cent tariffs on the US on March 4, 2025, targeting USD 30 billion worth goods, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain paper products. Later on, on March 13, Canada imposed the same percentage of reciprocal tariffs on a list of products totalling USD 29.8 billion, including aluminium products worth USD 3 billion.

Also read: Here’s the other side of the story: where will Canada redirect its 3.3 million tonnes of aluminium exports with US tariffs in effect?

In April again, Canada escalated the trade war by levying 25 per cent tariffs on non-CUSMA compliant vehicles imported from the US, and 25 per cent tariffs on non-Canadian and non-Mexican content of CUSMA compliant vehicles imported from the US.