Reports: US-Canada Deal May Cut Steel and Aluminum Tariffs from 50% to 25%
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A proposed US-Canada trade deal would halve steel and aluminum tariffs from 50% to 25%, Bloomberg reported citing people familiar with the matter — but details remain unfinished and rates won't apply uniformly across all products. This means → the Friday deadline still carries real uncertainty for North American steel and aluminum supply chains.
Tariffs halved — what does that actually look like?
The proposed deal cuts US tariffs on Canadian steel and aluminum from 50% to 25%, but the rate won't apply uniformly to every product.
Some derivative goods — downstream parts that contain steel or aluminum — may face different rates. This means → even with the headline rate halved, actual relief varies by product category.
Trump told reporters Wednesday he is "bringing down a very high number" but disclosed no specifics.
Why can't they just cut the rate across the board?
The US aluminum processing industry supports roughly 125,000 jobs. Manufacturing lobby groups such as the Prosperity Alliance have pressured the administration to protect those positions.
Their core demand: any aluminum tariff cut must be tied to "traceability requirements" — a mechanism tracking where imported aluminum ends up in the processing chain — to shield US rolling, drawing, and extrusion operations.
In plain terms = the US doesn't produce enough aluminum domestically. Canadian aluminum accounts for roughly half of US consumption, and existing tariff costs have been almost entirely passed on to American buyers. There's a real case for cutting rates, but cutting too fast risks gutting domestic processing jobs.
What does Canada want?
Ottawa has made lowering steel tariffs a negotiating priority while also pushing for cuts to auto tariffs.
A White House statement said Canada "expressed commitments" to eliminate "discriminatory practices" on autos, dairy, and alcohol — but provided no details.
Prime Minister Mark Carney said only that the two sides are "moving toward a deal," without disclosing terms. This reflects both sides signaling goodwill while the substantive terms remain in play.
Can they close by Friday? What are the pressure points?
Trump postponed the 50% tariff — originally set for Wednesday midnight — to Friday. Trade advisers from both sides continued talks Wednesday.
The steel and aluminum tariff adjustment is seen as the key lever for unlocking the broader deal. This means → if steel and aluminum stall, the entire agreement framework could stall with them.
As of Wednesday afternoon, full terms of the broader deal remain unclear. The White House, USTR, and the Canadian Prime Minister's Office all declined to comment. Three nodes will determine the outcome: the actual cut to steel and aluminum rates, how derivative-product rates are drawn, and whether Canada's dairy supply-management system survives intact.
Content is for reference only, not financial advice.