The US and Canada are negotiating a deal that would tax Canadian steel at 25% up to an annual quota, with the current 50% rate applying above that cap. Talks ran through a midnight deadline on August 21, 2026, and could also touch aluminum and auto tariffs.
Washington and Ottawa are closing in on a framework that would set a tariff-rate quota on Canadian steel, taxing imports at 25% up to a set volume and keeping the full 50% duty on anything above it. The deal marks the first serious attempt to unwind a tariff war that has escalated since last year.
Negotiators held intense talks from August 19 to 21, 2026. A midnight deadline loomed throughout, one that would otherwise trigger steeper tariffs on additional Canadian goods.
How the dispute escalated
The standoff traces back to Section 232, the national-security provision Washington has used to justify metal tariffs. The US imposed 25% duties on Canadian steel and aluminum starting in March 2025. By June 2025 those tariffs had doubled to 50%.
Canada responded in kind. Ottawa cut tariff-rate quotas on non-USMCA steel imports to 20% of 2024 levels starting in late 2025, retaliating against the US measures.
What the emerging deal covers
Under the framework taking shape, Canadian steel shipped to the US would face 25% tariffs up to a quota with suggested annual limits around 4 million metric tons, with the 50% rate still applying beyond that ceiling.
Aluminum came up in talks too, though its treatment remains unresolved. Auto tariffs also entered the conversation, with potential adjustments that could lower the rate on vehicles to 15%.
The quota is the real battleground
The 4-million-metric-ton figure under discussion is itself contested. A quota set too high strips American producers of the protection the tariffs were meant to provide; set too low, and Canadian exporters stay effectively locked out of their largest market even at the reduced rate.
Source: Crypto Briefing
Trading involves risk.
Risk Disclaimer
