Prime Minister Mark Carney on Wednesday said Canada will introduce a tariff rate quota for countries with which it has free trade agreements, excluding the United States, to protect the domestic steel industry.

Canada’s steel industry fears that Chinese steel facing steep tariffs in the United States will be sent north and overwhelm the Canadian market.

Canada introduced limits on how much foreign steel produced in countries other than the U.S. and Mexico can be imported to help a domestic sector reeling from President Trump’s tariffs.

President Trump announced a slew of tariffs on imports last week, with a proposed 35% tariff on Canadian goods, including in the automotive sector, which could deeply affect American drivers. Trump announced the tariffs on Truth Social with screenshots of a letter sent to Canada’s prime minister,

Almost half — 49% — of Ontario automotive businesses have paused or canceled investments because of the trade tensions.

The Canadian prime minister said it may not be possible to escape U.S. tariffs even with a bilateral agreement to resolve the current tariff row.

An Indian trade delegation has also reached Washington for fresh talks on a trade deal with the United States.

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