Canada commits C$7.5 billion to steel and automakers amid U.S. trade dispute

Tariff talks collapsed as steel and auto employment concerns persisted

Canadian Prime Minister Mark Carney said Wednesday that the federal government would provide C$7.5 billion (US$5.3 billion) to steelmakers and automakers. The announcement came as the sectors face potential job losses linked to the cross-border trade row with the United States.

The package is the latest federal aid for companies facing financial strain since President Trump imposed tariffs on foreign-made metals and automotives. Before Trump’s second term, Canada was the largest foreign supplier of steel and aluminum to the United States.

The Wall Street Journal reported that talks aimed at securing tariff relief from Washington collapsed in August, leading to a fresh deterioration in relations between the two closely integrated economies. Carney’s announcement came after that collapse.

For steelmakers, Carney said the money would help upgrade mills so they could produce for Canadian and non-U.S. markets. The announcement also came amid Ottawa’s dispute with Cleveland-Cliffs over the U.S. company’s plan to lay off workers at Ontario plants.

Canadian officials said they would use all legal means available to ensure Cleveland-Cliffs met employment obligations made to obtain government approval for its 2024 takeover of Stelco. Cleveland-Cliffs Chief Executive Lourenco Goncalves said the company had not breached the law and that a temporary reduction in headcount was needed as it refocused operations to counter pressure from tariffs.

Carney said the money would help automakers accelerate a pivot to electric-vehicle manufacturing.

Stellantis and its roughly 9,000 unionized Canadian employees are at an impasse in labor talks over plans to sell a Toronto-area factory to a local defense firm. The union and Canadian officials fear significant job losses unless Stellantis resumes production at the plant, which has been idled since 2024.

Those employment questions remain unresolved as the aid package is announced. Canadian officials are pressing Cleveland-Cliffs over its Ontario staffing plan, while Stellantis and its union are negotiating over the Toronto-area factory’s sale and production.

An earlier MSI report on Canada’s retaliatory tariffs recorded the collapse of trade talks and new U.S. tariffs on Canadian exports. Carney’s C$7.5 billion support package is a subsequent response to the same confrontation, adding direct aid for affected industries while the underlying tariff and employment pressures remain unresolved.