One year into a trade war, the United States’ role as the largest source of foreign steel in Canada is on shaky ground. U.S. steel producers shipped 22 per cent less product to Canada in 2025, a decline of about 700,000 tonnes, and their overall share of steel imports declined to 36 per cent from about 39 per cent, according to the Canadian Steel Producers Association (CSPA), a trade group. The shift was not wholly unexpected after U.S. President Donald Trump last March first erected tariffs on foreign steel, triggering retaliatory tariffs from other countries, including Canada. As trade flows shifted in the aftermath, Prime Minister Mark Carney called it a “rupture” in the global trading order. “Generally, this new world that Trump has thrown us into has caused a decline of trade,” Peter Warrian, an economist and distinguished fellow at the University of Toronto’s Munk School of Global Affairs, said. “Overall, global trade that involves North America has declined the most.” The overall volume of steel imports in Canada in 2025 declined 16 per cent to 2.4 million tonnes from 3.1 million tonnes in 2024, the CSPA said. Although the U.S. remains the largest source of foreign steel imports in Canada, market share amongst importers has shifted as the Canadian government has enacted a series of protectionist policies. François Desmarais, vice-president of trade and industry affairs at the CSPA, said there has been a decline in imports from the U.S. as well as from China, which shipped 250,000 fewer tonnes of steel products to Canada. China’s steel shipments to Canada declined 38 per cent year over year to about 400,000 tonnes from 650,000 tonnes. “Yes, the U.S. dropped by a significant chunk, but they remain the largest exporter to Canada,” he said. “China saw a reduction of their imports to Canada by a lot, more than any other country.” Overall, the CSPA said China’s share of imports declined to six per cent in 2025, down from eight per cent in 2025. It said the countries that gained market share last year include Argentina, Mexico and South Korea. But other data points to a different story. Global Affairs Canada (GAC) steel import data breaks down the market by the country where the steel was melted and poured and by the category of product. Desmarais said this data is drawn from import permits, which makes it subject to revision later on, and he disputed some of the numbers. Nonetheless, others say it is useful as an indicator of trends in the market. U.S. steel imports drastically slowed down as the trade war began in mid-March, just before Trump enacted his first tariffs on Canadian steel, according to GAC data. The U.S. in the first quarter of 2025 accounted for 55 per cent of flat steel imports, the largest category of steel products by value, which Warrian said is generally viewed as a proxy for manufacturing because it is used in industries such as automobiles. During the next three quarters, U.S. flat product shipments declined, accounting for an average of 45 per cent of the import market. Warrian said it makes sense that the U.S. still controls a large share of flat products, given that the Canada-U.S.-Mexico Agreement (CUSMA) gives preferential duty treatment to vehicles built with North American steel. But the U.S. held far less market share for long steel products such as rebar, the next largest category by value, which Warrian said could be considered a proxy for the construction sector. On long products, the U.S. also started strongly in 2025, accounting for 30 per cent of imports. During the next three quarters, it accounted for an average of 14 per cent of the market. A similar pattern occurred in pipe and tube products, the third-largest category, where the U.S. accounted for 22 per cent of the market in the first quarter, but dropped to an average of 10 per cent for the remaining quarters. Jonathan Ernest, a professor of economics at Case Western Reserve University in Ohio, said it would make sense that U.S. steel exports to Canada would decline since the U.S. erected tariffs on all foreign steel, which allowed some producers to sell their product in their home market, including products that might historically have been sold to other countries. “What we tended to see is a lot of countries either retaliated in some way (to U.S. tariffs) or imported less from the U.S.,” he said. “And the products being produced in the U.S. are more expensive, which could mean it’s selling less than what is expected.” China faced an even tougher series of market barriers, which began in October 2024 when the Canadian government enacted 25 per cent tariffs on its steel products. It also faces antidumping and countervailing duties in Canada on more than a dozen steel products, a result of the Canadian International Trade Tribunal finding that Chinese companies were selling products in Canada for less than the price in their home market or because it deemed products to be unfairly subsidized. Carney last summer also began implementing quotas on the amount of steel that countries without a free trade agreement could export to Canada, above which a 50 per cent tariff applied. Despite those barriers, China grew its market share in flat, long and pipe steel in the final three quarters of 2025, according to the GAC data. It accounted for 1.8 per cent of flat product imports in the first quarter of 2025, but that grew to 2.3 per cent on average across the next three quarters. On long products, China had 2.7 per cent of the import market in the first quarter and that grew to 9.6 per cent on average during the next three quarters. In the same timeframe, its share of pipe and tube imports jumped to 16.1 per cent on average from 8.9 per cent. “It looks like there was some substitution between U.S. and Chinese steelmakers, even though we had the Chinese tariffs,” said Colin Mang, an economist at McMaster University in Hamilton who studies the Canadian steel market and who helped sort the GAC data. He said Chinese steelmakers gaining market share despite the tariffs they faced supports the idea that their government is “willing to eat the cost and continue to subsidize its firms.” China subsidizing its industrial sectors has become a lightning rod for controversy as Canada looks to prop up its struggling manufacturing sectors. Without naming China, Carney has blamed “non-market practices abroad” for weakening Canada’s steel sector, which he described as key to national security because it is an input for defence products and critical infrastructure. China has also drawn criticism for contributing to a global glut of steel, which has driven down prices. China accounted for 55 per cent of global steel production in 2025, according to the research firm FastMarkets Global Ltd. Canada's last independent steel mill faces tough path back to profitabilityCanadian steel magnate offers $1,000 reward to whistleblowers who report foreign steel in public projects Within its steel industry, Warrian said China’s largest growth area has been in long products, so it makes sense that its exports in this area would surge. “Some of this stuff is going to be expected,” he said. “The Chinese steel industry had a huge expansion in the last 10-15 years, a lot of it related to real estate and infrastructure growth. • Email: gfriedman@postmedia.com