Canada took a bold step in its ongoing trade dispute with the United States by launching a formal complaint with the World Trade Organization (WTO) over newly imposed U.S. tariffs on Canadian steel and aluminum.
The tariffs, which came into effect on March 12, slapped a 25% duty on these critical exports, prompting Ottawa to accuse Washington of breaching international trade rules. This move marks the latest chapter in a tit-for-tat trade war that threatens to disrupt the deeply integrated North American economy.
The decision to escalate the matter to the WTO reflects Canada’s frustration with what it calls “unjustified” tariffs imposed by the administration of U.S. President Donald Trump. These levies, enacted with no exemptions, reversed previous carve-outs that had spared Canada from similar duties. With billions of dollars in trade at stake, Canada is not backing down, announcing retaliatory tariffs on nearly $21 billion worth of U.S. goods while seeking resolution through the global trade body.
This dispute traces its roots back to Trump’s renewed push to protect American industries, a cornerstone of his economic agenda since his first term. The U.S. justifies the tariffs under national security provisions, claiming that reliance on foreign steel and aluminum undermines its domestic production capacity. Canada, however, argues that as a close ally and the largest supplier of these materials to the U.S., such measures are baseless and punitive. The tariffs hit Canada hard—last year alone, it exported $15.9 billion in steel and $19 billion in aluminum to its southern neighbor, fueling industries from automotive manufacturing to construction.
Canada’s WTO filing, circulated to members on March 13, contends that the U.S. measures violate the General Agreement on Tariffs and Trade (GATT) of 1994. Specifically, Ottawa claims the tariffs terminate Canada’s prior exemption from additional duties and unjustly increase levies on aluminum products. The request for consultations is the first step in the WTO dispute process, giving both nations 60 days to negotiate a solution. If unresolved, Canada can escalate the case to a formal adjudication panel—a process that could take months but carries significant weight in international trade law.
Prime Minister Justin Trudeau has minced no words in condemning the U.S. action. Speaking at an artificial intelligence summit in Paris, he called the tariffs “unacceptable” and vowed a “firm and clear” response if necessary. Behind the scenes, Trudeau reportedly raised the issue directly with U.S. Vice President JD Vance, highlighting the ripple effects on states like Ohio, a key steel-consuming region. Canada’s retaliatory package, announced alongside the WTO complaint, targets $20.8 billion (C$30 billion) in U.S. imports, including steel, aluminum, tools, computers, sports equipment, and cast-iron products—effective as of 12:01 a.m. on March 13.
The U.S. stance remains unyielding. Speaking to reporters in the Oval Office on March 13, Trump doubled down, saying, “We’ve been ripped off for years, and we’re not going to be ripped off anymore. I’m not going to bend at all—aluminum, steel, or cars.” The White House frames the tariffs as a win for American workers, with Trump’s trade adviser Peter Navarro touting them as leverage from “the best and biggest economy in the world.” Yet, this hardline approach has sparked concerns among U.S. businesses, particularly those reliant on Canadian metals, who fear rising costs and supply chain chaos.
The economic stakes are staggering. Canada supplies nearly a quarter of U.S. steel imports and almost 60% of its aluminum, making it an indispensable partner in a supply chain that crisscrosses the border. Industries like automotive manufacturing, which depend on seamless trade under the U.S.-Mexico-Canada Agreement (USMCA), are bracing for disruption. Ford CEO Jim Farley recently lamented that Trump’s tariff moves have already added “a lot of cost and a lot of chaos” to American business, a sentiment echoed by smaller firms like Icarus Brewing in New Jersey, which stockpiled aluminum cans amid price hike warnings from suppliers.
Canadian industry leaders are equally alarmed. Rahim Moloo, owner of Toronto-based Conquest Steel, told CBC News that U.S. distributors began canceling orders even before the tariffs took effect, projecting a 25% sales drop. Economist Peter Warrian from the University of Toronto warned of “serious layoffs” in the auto sector within weeks if the situation persists. In Hamilton, Canada’s steel capital, workers are preparing for a slowdown, a grim reminder of the 40% drop in steel exports following Trump’s 2018 tariffs.
This isn’t the first time Canada has turned to the WTO to counter U.S. trade aggression. In 2018, when Trump imposed similar steel and aluminum tariffs, Canada filed a complaint and slapped retaliatory duties on $16.6 billion in U.S. goods, targeting politically sensitive states. That standoff ended with a negotiated lifting of tariffs under the USMCA in 2019. Ottawa hopes history repeats itself, but the current climate—marked by Trump’s return to office and a broader tariff blitz on Canada, Mexico, and beyond—suggests a tougher road ahead.
The retaliation strategy is calculated. Canada’s 25% tariffs on U.S. steel and aluminum mirror the U.S. duties, while additional levies on $14.2 billion in goods like computers and sports equipment aim to pressure American lawmakers. Finance Minister Dominic LeBlanc emphasized that these measures, totaling $29.8 billion, match the value of affected Canadian exports. “This is a dollar-for-dollar response,” he said, adding that Canada remains open to dialogue but will “stand up for our jobs, our industries, and our workers.”
Global reaction has been swift. The European Union, facing its own tariff threats from Trump, signaled support for Canada, with Commission President Ursula von der Leyen promising “firm and proportionate countermeasures.” Mexico, also hit by the steel and aluminum duties, called them “unjustified” but has yet to outline retaliation. Meanwhile, China, embroiled in its own trade spat with Canada over electric vehicles, watches closely—its own WTO complaint against Ottawa’s tariffs filed just months ago underscores the growing web of global trade tensions.
For Canadian businesses, the government is rolling out relief measures. Export Development Canada’s Trade Impact Program offers support for exporters seeking new markets, while the Business Development Bank provides favorable loans to affected sectors. Temporary flexibilities in the Employment Insurance Work-Sharing Program aim to cushion workers facing reduced hours. Still, these steps may only soften the blow of a prolonged dispute.
Critics argue the tariffs defy economic logic. The Tax Foundation estimates that Trump’s earlier steel and aluminum levies cost the U.S. 75,000 jobs, a lesson some hoped he’d learned. Warrian points out the absurdity of taxing steel that crosses the border multiple times before ending up in a car: “It’s a supply chain nightmare.” Yet, Trump’s base sees it as a patriotic stand, even as markets wobble—the S&P 500 dropped 0.7% on March 11, reflecting broader unease.
As the WTO process unfolds, the stakes extend beyond steel and aluminum. Trump’s threats of broader 25% tariffs on all Canadian goods, tied to border security and trade imbalances, loom large. Canada’s $1.3-billion border security plan, announced in February, failed to appease him, leaving the USMCA’s future uncertain. For now, Canada’s WTO gambit is a bid to restore reason to a fraying partnership—but with Trump unbowed, this trade war may be just beginning.
