CSPA: Working together to combat global steel overcapacity

The global challenge of steel overcapacity is no longer simply a trade issue. It is an economic and national security issue that demands coordinated action from likeminded countries committed to fair markets, domestic supply chains, and their national steel industries.

For decades, massive state-supported steel overproduction, particularly from China, has distorted global steel markets, undermined investment, threatened jobs, and weakened domestic manufacturing across North America and beyond. Canadian steel producers have long argued that this challenge cannot be solved by any one country acting alone. It requires strong domestic measures backed by international cooperation.

Canada has taken meaningful steps and those measures are producing results. The Canadian trade framework now directly targets China’s steel overcapacity through multiple layers. China is included in Canada’s tariff-rate quota (TRQ) system, subjected to derivative steel tariffs, and covered by a tariff on all direct shipments as well as on all China Melt and Pour (M&P) steel entering Canada. Furthermore, Canada’s M&P import monitoring requirements are enabling significant transparency on the true origin of steel entering our market regardless of where it is processed.

While some may baselessly claim that Canada is a backdoor allowing dumped steel into our continent, the numbers tell a different story. Since the first quarter of 2025, Canadian trade measures have had a clear impact: imports of Chinese steel into Canada have fallen by nearly 40%. Primary steel imports from countries that Canada does not have a free trade agreement under the tariff-rate quota measures have decreased by 35% in the first quarter of 2026 compared to 2025. Overall, all offshore imports of primary steel products under the tariff-rate quota measures have decreased by 16% in just the first quarter of 2026 compared to 2025.

Our strong policies, however, are only as effective as their enforcement.

To that end, we welcome the Canada Border Services Agency’s (CBSA) efforts to further enhance steel enforcement through significantly increasing resources dedicated specifically to steel imports. The Canadian Steel Producers Association (CSPA) continues to work closely with the CBSA to strengthen training, improve understanding of steel products and market dynamics, and ensure investigators have the tools they need to identify unfair trade practices. We are also encouraged by the collaboration of CBSA with the US Customs and Border Protection on market observations, data, and best practices. 

Addressing global steel excess capacity is a multi-dimensional challenge driven by a wide array of market-distorting subsidies, unfair trade practices and industrial policies that require a coordinated response.

That coordination must start here in North America with Canada, Mexico, and the United States deepening our cooperation. This requires resolving the current trade dispute to strengthen our intra-regional steel trade on the basis of free and fair trade. Our continent should be the global success story of how to stop overcapacity steel from undermining our steel market. 

A weakened steel industry in any one of the three CUSMA (USMCA) countries will create risks to the entire region. Defending our continent against global excess steel capacity is about far more than protecting one industry. It is about growing our economies, strengthening North American supply chains, and safeguarding our continental security.

In Canada, a strong domestic steel sector underpins thousands of high-quality jobs, supports communities across the country, and provides the industrial capacity required during times of geopolitical uncertainty. Steel is the foundation of Canada’s manufacturing economy and an essential input for defence, energy, transportation, construction, and critical infrastructure.

The CSPA will continue to advocate for innovative trade measures and strengthened enforcement to stop overcapacity steel from entering Canada. However, it is vital that our three CUSMA countries resolve the ongoing trade dispute and return to strong intra-regional working together on global overcapacity. By aligning our efforts we will support a stronger North American steel market for workers and communities while protecting our continent for generations to come.