Canada faces EU carbon tariff on steel and aluminum exports

Canada faces an imminent carbon tariff threat from the European Union as the bloc fully implements its Carbon Border Adjustment Mechanism, with Canadian iron, steel, and aluminum exports not exempt despite Canada's national carbon price and trade deal. Internal documents from Global Affairs Canada obtained by CBC News show the EU's carbon tariff will impose compliance costs and border charges on Canadian exporters starting in 2027. Approximately $2.8 billion in annual goods are exposed, with Newfoundland and Labrador and Quebec hit hardest, facing $885 million and $792 million in exposed exports respectively. The EU exempts countries with linked carbon pricing systems, but Canada's carbon price is not connected to Europe's, making exemption currently impossible. Canadian diplomats are seeking agreements at this week's Canada-EU Summit in Montreal, while the tariff fully ramps up by 2034, potentially adding over 10 percent to Canadian steel costs.