On 30 July 2025 the Governor in Council amended the Order Imposing a Surtax on the Importation of Certain Steel Goods (SOR/2025-148, effective 27 June 2025), via SOR/2025-155, effective 1 August 2025. The amendment raises the tariff-rate quota (TRQ) available to countries with a Canadian free trade agreement (excluding CUSMA partners US/Mexico) from a lower prior allocation to 100% of 2024 import volumes, while holding the quota for non-FTA-partner countries at 50% of 2024 volumes; imports exceeding either threshold face a 50% surtax. The amendment also expands the list of covered steel product categories from 5 broad groupings to 23 specialized subcategories (ingots, billets, hot- and cold-rolled sheet, rebar, wire rod, structural steel, and multiple pipe types). Ottawa framed the changes as addressing the risk of steel produced in third countries being diverted into the Canadian market as a result of US Section 232 tariffs and non-market foreign production overcapacity.

Analyst notesShow

Mechanism

This is an amendment to Canada's June 2025 global steel-safeguard surtax regime (SOR/2025-148), which itself followed the pattern set by Ottawa's China-specific steel/aluminum surtax a year earlier ([[2024-10-01-canada-china-surtax-order]]). Where the original June order set a uniform TRQ structure, SOR/2025-155 differentiates FTA partners (raised to 100% of 2024 volumes) from non-FTA partners (held at 50%), and sharply narrows the product-category definitions so the quota tracks actual trade flows rather than broad HS groupings — reducing scope for transshipment or misclassification to dodge the 50% surtax.

This sits directly upstream of the much larger November 2025 tightening ([[2025-11-26-canada-steel-softwood-lumber-protection-measures]]), which cut the same FTA/non-FTA quotas further (100%→75%, 50%→20%) and added a 25% derivative-steel tariff — evidence that the July 2025 rebalancing did not fully stem diversion pressure and Ottawa returned to tighten again within four months.

Downstream implications

Confirms Canada is treating global steel-trade diversion (driven by US

Section 232 tariffs pushing excess steel toward non-US markets) as a recurring, escalating problem rather than a one-off correction.

FTA partners (EU, UK, South Korea, etc.) gain preferential quota access

relative to non-FTA exporters, reinforcing Canada's FTA network as a trade-policy lever distinct from its CUSMA relationship with the US.

The narrowed 23-category product definition is a template Canada later

reused and tightened further in the November 2025 package.

Open questions

Full CAD import-value impact of the expanded 23-category coverage was

not disclosed in the regulatory text reviewed.

Whether the 100%/50% FTA/non-FTA split was recalibrated again between

August and November 2025 beyond the confirmed November tightening.

Sources

Primary: Canada Gazette, Part 2: Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods (SOR/2025-155)

Secondary: Global Trade Alert state act 95314

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Mechanism

Downstream implications

Confirms Canada is treating global steel-trade diversion (driven by US

Section 232 tariffs pushing excess steel toward non-US markets) as a recurring, escalating problem rather than a one-off correction.

FTA partners (EU, UK, South Korea, etc.) gain preferential quota access

relative to non-FTA exporters, reinforcing Canada's FTA network as a trade-policy lever distinct from its CUSMA relationship with the US.

The narrowed 23-category product definition is a template Canada later

reused and tightened further in the November 2025 package.