Canadian steelmakers offset some US tariff pain with domestic demand
XLI•Canadian steelmakers are shifting toward domestic customers as mining, energy and data center projects support demand, while government loans and import quotas help offset US tariffs. Domestic steel’s share of Canadian use rose to 51% in 2025 from 41% in 2024.
1. Domestic demand grows
Canadian steelmakers have been diversifying from the US market and focusing on domestic demand since US tariffs on imported steel rose to 50% in June 2025. Canada’s steel exports to the US fell 60% in 2025, while the share of steel used in Canada that was produced domestically rose to 51% from 41% in 2024, according to the United Steelworkers union.
2. Projects support recovery
New mining, energy and data center projects are supporting demand, particularly in western Canada, where a 1.2 gigawatt data center is under construction in Saskatchewan. Canadian steel demand grew an estimated 2.7% in 2025 and is projected to rise about 0.9% in 2026, according to an OECD report.
3. Government measures
In May, the federal government announced C$1 billion in loans for the steel, aluminum and copper industries and extended a cap on foreign steel imports. The United Steelworkers wants tighter import quotas and tariffs on steel used in the US auto and aviation industries, which are currently exempt from broader Canadian retaliatory tariffs.
