The Canadian steel industry had asked the government to introduce tougher anti-dumping measures to protect the domestic industry. U.S. President Donald Trump increased import duties on steel and aluminum to 50% from 25% earlier this month. Canada is the top seller of steel to the United States.

Canada will reduce the amount of foreign steel that importers can bring in tariff-free, a move to help domestic producers suffering from US President Donald Trump’s levies on the sector.

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.