Canada is preparing to raise counter-tariffs on U.S.-made steel and aluminum on July 21 if a broader trade deal with the United States isn't in place by then, Prime Minister Mark Carney announced on June 19. This move is a defensive response to Washington's 50% tariffs on those metals, frustrating Canadian producers and triggering concerns among agriculture and trade stakeholders.

"In parallel, we must reinforce our strength at home - and safeguard Canadian workers and businesses from the unjust U.S. tariffs," Carney said. Canada will adjust its existing counter-tariffs on U.S. steel and aluminum products by that date, depending on progress in the broader trading agreement.

Canada sends over 90% of its steel and aluminum exports to the U.S. These metals are essential to farm equipment, machinery, irrigation, and infrastructure. The threat of higher duties could ripple through input costs, construction budgets, and commodity prices, influencing elements of the Farm Bill and U.S. agricultural trade policy.

Carney also introduced procurement reforms: federal contracts for steel and aluminum will be restricted to Canadian suppliers or those from reciprocal trading nations. This aims to protect 123,000+ jobs in Canada's $15 billion metals sector.

Stakes and timelines

Canada and the U.S. have agreed to finalize a comprehensive economic and security deal by July 21, covering metals, autos, and supply chain security. If that doesn't happen, Canada may activate:

Higher retaliatory duties

Tariff-rate quotas capped at 100% of 2024 levels

Exclusion of U.S. firms from government contracts

Carney noted these actions are contingent on negotiation progress, not permanent, though they respond to current economic volatility and trade tensions.

Implications for U.S. agriculture and ag trade

Canada is the top export market for 36 U.S. states. Cross-border metals trade supports ag producers, co-ops, and farm manufacturers. With the USDA projecting a $49 billion ag trade deficit for FY2025, any supply chain disruption could pressure commodity prices and farm operating costs.

Potential impacts on U.S. farmers include:

Rising costs for metal-based equipment and structures

Delays in projects using USDA rural development grants

Price volatility in fertilizers and ag inputs

Negotiations between Canada and the U.S. continue. Carney stressed a goal of "true free trade," especially in metals and autos, and did not confirm whether any tariff-laden deal would be acceptable.

U.S. agriculture leaders are pushing for swift resolution, linking tariff instability to broader risks for equipment access, farm planning, and commodity flow. The 2025 Farm Bill could respond with provisions to support resilient supply chains or offset unexpected cost increases tied to global trade friction.

Unless a deal is reached, Canada's counter-tariffs and contract restrictions will take effect July 21, a signal that metal tariffs now impact much more than manufacturithey influence the future of U.S. agriculture.