Understanding Canada’s moves to block cheap steel imports

Construction workers are seen on the site of a new development in Long Beach, Calif., March 5, 2025. Photo by FREDERIC J. BROWN/AFP via Getty Images

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Prime Minister Mark Carney announced tighter rules around steel imports this week. The move is an effort to protect Canada’s domestic industry from “dumping” as the global trade of the metal undergoes major shifts because of government actions out of the United States and China.

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Here’s a look at some of the key questions.

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What is dumping?

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Dumping refers to foreign firms selling goods at artificially low prices, or prices that don’t accurately reflect their cost of production. It can also include a company selling goods for less in foreign markets than comparable goods in their home market.

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Companies tend to dump goods either by selling below cost to gain market share, or because an excess of production in their home countries has them looking for markets to off-load the goods and recover some costs.

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Government subsidies can be a significant contributor to firms selling at artificial prices because they help distort price structures. While subsidies are widespread, including in Canada, they can go so far within international trade rules. Subsidies that artificially reduce costs so manufacturers can flood foreign markets at unfairly low prices crosses that line.

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How big of a problem is steel dumping for Canada?

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The steel industry has long insisted it’s a problem, especially as it points to offshore imports climbing from 19 per cent of the Canadian market in 2014 to 39 per cent in 2022.

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The industry also dominates anti-dumping inquiries at the Canadian International Trade Tribunal, the body tasked with determining whether imported goods are being sold at artificially low prices. The tribunal has largely ruled in favour of applications that dumping has occurred and is harming Canadian industry.

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And while there are problems now, the bigger concern is how much more product, especially from China, might get diverted to the Canadian market as the U.S. moves to close off imports.

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Some observes, however, say there’s still not much data showing the problem getting worse.

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“As far as I can tell, there is no imminent flood of imports into the Canadian market,” said Dan Ciuriak, an international trade expert and senior fellow at CIGI, the C.D. Howe Institute, and others.

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He said there is already so much trade distortion and protectionism in the global steel industry not much steel trades freely anyway, while the fear of metal that originated from China via other countries doesn’t make a lot of sense economically, making the latest moves by Carney “overkill.”

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“That’s all theatre as far as I’m concerned,” he said.

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There is however the threat it could as excess capacity grows globally, especially in China — where its 50 million tonnes of overcapacity could swell to 250 million tonnes over the next decade, according to Wood Mackenzie.

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The problem of overcapacity is getting worse as the uncertainty caused by U.S. President Donald Trump‘s trade policies have made companies hesitant to go ahead on big projects, said Ciuriak.