Canadian Prime Minister Mark Carney took decisive action on Wednesday, November 26, 2025, unveiling a suite of measures aimed at shoring up the country’s embattled steel and lumber industries. These sectors have been battered by a barrage of tariffs imposed by U.S. President Donald Trump, marking a dramatic turn in the economic relationship between the two North American neighbors. According to The Globe and Mail, this move comes nearly a year after Trump first started threatening tariffs on Canada—a period that has seen seismic shifts in both countries’ economic and political landscapes.
The new Canadian plan, announced in both Ottawa and Toronto, includes a fresh tariff on steel products, a significant reduction in the amount of foreign steel allowed into the country, and a subsidy to lower the costs of transporting lumber and steel by rail. Carney also revealed an additional 500 million Canadian dollars (about 356 million U.S. dollars) in loan guarantees for the softwood lumber industry, on top of incentives to encourage homebuilders to use Canadian-made materials. As reported by the Associated Press, Ottawa will begin subsidizing freight fees for rail shipments of steel and lumber across provincial borders starting next spring, a move designed to bolster domestic industry as the U.S. market becomes increasingly inaccessible.
This policy reversal is especially striking given that, just over a month ago, Carney and Trump appeared on the verge of signing a steel and aluminum trade accord during a meeting in South Korea. Those hopes were dashed when President Trump abruptly cut off talks after Ontario aired a television commercial in the U.S. that featured former President Ronald Reagan criticizing tariffs. According to The Globe and Mail, the ad campaign infuriated Trump, leading him to threaten an additional 10 percent tariff on Canadian exports—a threat he has yet to act on as of late November.
Trump’s tariffs have hit Canadian exports hard. Steel now faces a 50 percent tariff, while softwood lumber is taxed at 45 percent following the most recent U.S. hike. Carney painted a sobering picture of the fallout: “As a consequence, many of our strengths have become vulnerabilities. Last year, more than 75 percent of our exports went to the United States. 90 percent of our lumber exports, 90 percent of our aluminum exports, and 90 percent of our steel exports, all bound for a single market,” he said, as reported by the Associated Press. “We must protect our workers and industries who are most exposed to U.S. tariffs.”
To further shield the steel industry, the Canadian government is slashing the quota on steel imports from countries without free-trade agreements with Canada—from 50 percent to just 20 percent of 2024 levels. These measures are designed not only to protect domestic producers but also to reposition Canadian industries for what Carney called “the new global economy.” In his words: “This government will do whatever it takes to protect our sectors. Not just protect them, but to help them reposition for the new global economy.”
But the effects of the Trump tariffs extend far beyond steel and lumber. According to The Globe and Mail, the past year has left an indelible mark on Canada’s economy and its relationship with the United States. Canadian exports of manufactured goods—especially automobiles—have dropped sharply, and executives are grappling with unprecedented uncertainty. The economic outlook has dimmed, with workers more apprehensive about job prospects than at any time since the pandemic’s peak. The article notes that Canada’s economic outlook has been downgraded, a clear sign of the lasting impact of these trade tensions.
Perhaps most telling is the shift in Canadian attitudes toward their southern neighbor. As The Globe and Mail reports, Canadians’ views of the U.S. have soured considerably. There’s been a sharp decline in interest in traveling to the United States or spending money there as tourists. Imports of American wine and spirits have plummeted—down 95 percent since last November—as Canadians increasingly opt for homegrown alternatives. The “Made in U.S.A.” brand, once a staple in Canadian households, is now met with skepticism or outright avoidance.
This souring of sentiment has also reshaped Canada’s political landscape. Carney, who branded himself as Canada’s best defender in the spring election, has had to backtrack on some of his more combative rhetoric. In September, he dropped the retaliatory duties that Canada had slapped on certain U.S. imports in a bid to revive trade talks. However, these efforts have yet to yield results, as trade negotiations remain at a standstill.
Despite the chilly climate, there are faint glimmers of hope. Trump’s four-week-old threat to hike tariffs on Canadian goods by another 10 percent—which would push some tariffs to a staggering 45 percent—remains unfulfilled. Meanwhile, Carney is mulling a trip to Washington in early December to meet with Trump and possibly rekindle stalled trade talks. As he told reporters, “We are ready to re-engage on those talks when the United States wants to re-engage.” He also mentioned he’ll be in Washington for the FIFA World Cup 2026 final draw on December 5, where he plans to speak with Trump.
Trump’s policies have had other ripple effects as well. The Canadian government has been prompted to take defense spending more seriously, with historical military spending and targets now under renewed scrutiny. According to The Globe and Mail, Canadian tariff revenue data as of August 2025 reflect not only the economic pain but also the government’s attempts to adapt to this new reality.
For many Canadians, the past year has been a lesson in economic vulnerability and resilience. The decades-long process of ever-closer economic integration with the United States, as Carney put it, is now “over.” The challenge ahead will be to rebuild and reorient Canada’s industries and international relationships in a world where the old rules no longer apply. As Carney summed up, “We must protect our workers and industries who are most exposed to U.S. tariffs.”
As the dust settles on a tumultuous year, Canada stands at a crossroads—forced to confront new realities, but determined to chart a course that secures its economic future and protects its most vital industries.
