Canadian Prime Minister Mark Carney has announced several new measures to help Canada’s steel industry that is reeling from U.S. import tariffs.
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The new measures announced in Canada’s capital city of Ottawa place restrictions on imports of foreign steel products. For countries that do not have a free trade agreement with Canada, the federal government is tightening its tariff-rate quota on steel imports from 50% to 20% of 2024 levels.
A tariff-rate quota refers to a limit on the quantity of a product that can be imported at a lower duty. Essentially, countries that don’t have a free trade agreement with Canada can bring in less steel at lower tariff rates. At a press conference, Carney said the change could create as much as $850 million in domestic demand for Canadian steel products.
The new measure has implications for steel producers such as Nucor (NUE), Cleveland-Cliffs (CLF), and Algoma Steel (ASTL).
No Break for the U.S.
The Canadian Prime Minister added that for countries with a current free trade agreement with Canada, quotas for steel products are being reduced from 100% to 75% of 2024 levels. However, the U.S. and Mexico are not included in the break that’s being given to countries that have a free trade agreement with Canada.
Carney and other government officials said that tightening quotas rather than placing a standard tariff on steel products will help Canadian companies transition away from foreign steel while also ensuring that needed supplies come into Canada.
The new measures come as Canadian producers struggle after U.S. President Donald Trump placed an additional 50% tariff on Canadian steel products in June of this year. Carney and Trump are scheduled to meet in Washington, D.C. on Dec. 5 to discuss trade issues.
Is ASTL Stock a Buy?
The stock of Algoma Steel has a consensus Moderate Buy rating among three Wall Street analysts. That rating is based on one Buy and two Hold recommendations issued in the last three months. The average ASTL price target of $6.06 implies 55.38% upside from current levels.
