Canada, U.S. impasse on Section 232 tariffs

Prime Minister Mark Carney and President Donald Trump are stuck on one of the hardest parts of the Canada-U.S. trade file: tariffs the White House says are about national security, and Ottawa says cannot be left outside a broader negotiation. The immediate dispute centers on Section 232 measures covering metals and lumber, which remain in place as bilateral talks continue. National Post reported on May 21 that the two sides had reached an impasse, with Canada seeking relief but not reopening the core architecture of the Canada-United States-Mexico Agreement, or CUSMA. ### What exactly is the fight over? Section 232 is a U.S. trade law that lets a president restrict imports on national-security grounds after a Commerce Department process. Trump has used it repeatedly in his second term across metals and other sectors, including timber and lumber. A White House fact sheet published April 2 said the administration had strengthened tariffs on imported steel, aluminum and copper and changed how those duties are calculated. (ca.news.yahoo.com) The April 2 White House fact sheet said articles made entirely or almost entirely of aluminum, steel or copper pay a 50% tariff on full value, while some derivative articles pay 25% and certain industrial equipment pays 15% through 2027. The proclamation was later published in the Federal Register on April 9. (whitehouse.gov) ### Why is Canada tying this to the wider CUSMA talks? Mark Carney said on April 22 that Canada does not view CUSMA renewal and sectoral tariffs as separate tracks. CBC reported that Carney said there needs to be a “comprehensive approach” and that Canada had made counter-proposals to the United States. Dominic LeBlanc, Canada’s trade minister, has also said Ottawa does not want a “one-off” CUSMA deal while industries hit by U.S. tariffs are left for another round, according to CBC’s April 22 report. (whitehouse.gov) That position helps explain why tariff relief on metals and lumber has become a central Canadian demand even as Ottawa is not seeking major changes to the trade pact itself. (cbc.ca) ### Which tariffs are still hitting Canadian exports? CBC reported in February, updated in March, that Canadian steel and aluminum exports to the United States face Section 232 tariffs of 50%. The same CBC guide said many CUSMA-compliant goods are exempt from other U.S. tariffs, but steel, aluminum, automobiles and softwood lumber still face targeted duties. (cbc.ca) Softwood lumber sits in a separate but overlapping dispute. CBC reported that the combined anti-dumping and countervailing duty rate on Canadian softwood was 35.16%, and that the Trump administration also added a 10% global tariff on softwood timber and lumber that took effect on Oct. 14, 2025. The White House’s September 2025 proclamation on timber and lumber said the action followed a Section 232 investigation into whether imports threatened U.S. national security. (cbc.ca) ### Was there ever a near-deal? POLITICO reported on May 5 that Canada and the United States had come close in October 2025 to an interim arrangement covering steel, aluminum, uranium and energy. Pete Hoekstra, the U.S. ambassador to Canada, told POLITICO the Oval Office meeting at the time was “an awesome meeting,” but the talks later collapsed. (cbc.ca) POLITICO reported that one concept under discussion was a tariff-rate quota for steel, which would have allowed a fixed volume to enter at lower tariff rates before higher duties applied. That account suggests the current impasse comes after months of failed attempts to carve out sector-specific relief. ### What happens next? Canada’s government says its approach is to protect workers and businesses while pursuing a negotiated settlement with the United States. (politico.com) Carney said on April 22 that the talks “will take some time,” and Canada’s finance department says negotiations with Washington are continuing alongside Canadian countermeasures and business-support programs. CUSMA’s mandatory joint review is due by July 2026 under the agreement’s sunset mechanism, and that deadline gives both governments a near-term forum for the next round of bargaining over tariffs, exemptions and the broader trade relationship. (cbc.ca)