Harsh warning from Joly: “The steel industry will collapse without government support.”

Speaking on the Vassy Kapelos Show on iHeart Radio on Thursday, Joly said, “Survival and, in my view, much more than that, the ability to thrive is the reality.”

In March, the U.S. imposed a 25% tariff on Canadian steel and aluminum imports, raising it to 50% in June. Joly stated that the government is ready to take steps beyond those previously announced to support the sector, including measures such as ensuring the use of domestic steel in Canadian shipyards and leveraging procurement power in public purchases to support the industry.

On Wednesday, the Prime Minister announced additional tariffs on steel originating from China. Although Canada announced countermeasures in February in response to the U.S.’s initial tariff decision, it has not yet responded to the doubling of tariffs on steel and aluminum.

Sharp decline in exports and job losses
François Desmarais of the Canadian Steel Producers Association said that following the U.S.’s initial 25% tariff, Canada’s steel exports to the U.S. fell by approximately 25%, resulting in around 1,000 job losses. He emphasized that with the tariff rising to 50%, exports have almost completely halted.

Desmarais added that efforts to diversify the domestic market would not be enough to compensate for the loss of exports to the U.S., as the U.S. is the largest buyer of Canadian steel and the global market is already oversaturated.

Steel: a critical sector for defense and infrastructure
Joly noted that the steel sector is strategically important not only for manufacturing but also for the defense industry. Canada, aiming to meet NATO’s defense spending targets earlier than expected, could create demand for domestic steel production through defense industry supplies and major infrastructure projects.

Tough negotiations with the U.S.
As discussions continue for a new economic and security agreement between Canada and the U.S., President Donald Trump announced last week that a 35% tariff could be applied to Canadian imports starting August 1. The White House clarified that this rate would not apply to products covered under the Canada-U.S.-Mexico Agreement (CUSMA).

Joly described the U.S. administration as “a tough administration,” stating, “At this stage of the negotiations, we will not negotiate in public. We will defend Canada’s interests and stand behind Canadians.”