Trump Waives Planned 500% Tariff on Russian Goods While Canadian Steel Still Faces 50% U.S. Duties

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A new decision from Washington has highlighted a striking contrast in American trade policy. President Donald Trump has suspended a planned tariff of up to 500% on Russian goods, while Canadian steel producers continue facing steep U.S. import duties that have disrupted exports and threatened manufacturing jobs.

The decision, announced through an executive order dated October 16, 2026, temporarily blocks major sanctions and tariffs contained in legislation designed to pressure Russia over its invasion of Ukraine.

Trump says the waiver serves American national interests. Yet the announcement comes as Canadian steelmakers struggle under 50% U.S. tariffs, prompting questions about Washington’s different approaches to economic pressure.

Although the measures operate under separate laws and serve different stated purposes, their contrasting treatment illustrates the uncertainty facing Canadian manufacturers and America’s international trading partners.

Trump Suspends a 500% Tariff Before It Can Take Effect

President Donald Trump issued an executive order on October 16 waiving significant tariffs and sanctions against Russia that were scheduled to take effect under legislation he signed just weeks earlier. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, enacted September 18, authorized import duties of up to 500% on Russian goods. The law was designed to increase economic pressure on Moscow over its invasion of Ukraine, targeting Russian trade, energy revenues and entities connected to the country’s military activities. The new executive order specifies a 500% rate but immediately suspends its application.

The timing is particularly significant. The legislation required action within 30 days of its September 18 enactment, meaning the deadline was approaching when Trump signed the waiver. Rather than allowing the new duties to become payable, the administration used a provision permitting the president to suspend them on national-interest grounds. The order also waives several sanctions on Russian individuals and organizations. As a result, the newly planned tariffs are not being collected, although previously established American restrictions against Russia remain relevant.

The 500% Tariff Was a Planned Penalty, Not an Existing Charge

The distinction between announcing a tariff and actually collecting it is essential to understanding Trump’s decision. The Graham Act provided for duties of up to 500% on goods imported directly from Russia. Trump’s executive order identified the maximum 500% rate but simultaneously activated the law’s waiver provisions. Consequently, the announcement does not mean Washington had been collecting a 500% tax on Russian imports and suddenly reduced it to zero. The new tariff was suspended before taking effect, and the waiver does not automatically remove duties imposed under earlier legislation.

The numbers nevertheless demonstrate the scale of the planned economic pressure. A hypothetical Russian shipment valued at US$100,000 would face an additional US$500,000 duty if subjected to a 500% tariff, excluding other charges. By comparison, a 50% tariff on a Canadian steel shipment with the same customs value would amount to US$50,000. The example illustrates the different statutory rates, not a direct comparison of actual import volumes or exemptions. What makes the decision politically significant is that Washington has suspended a potentially enormous new penalty on Russian trade while keeping major restrictions on Canadian steel in place.

The Waiver Also Suspends Penalties on Countries Buying Russian Energy

The decision extends beyond products shipped directly from Russia. The Graham Act also targeted countries purchasing Russian oil and natural gas, along with governments accused of helping Moscow evade sanctions. Under the law, the United States could impose tariffs of up to 100% on goods from the five largest qualifying importers of Russian energy and certain leading facilitators of sanctions evasion. The objective was to discourage international purchases that provide revenue to Russia. Trump’s October 16 executive order waives those additional duties while directing American trade officials to continue monitoring Russian energy transactions.

Countries including China and India had raised concerns about the proposed restrictions. Both are significant purchasers of Russian energy, and the possibility of higher American tariffs threatened to complicate their economic relationships with Washington. Analysts also warned that aggressive sanctions could disrupt oil markets and contribute to higher fuel prices. The administration has faced pressure over energy costs ahead of the November U.S. midterm elections. However, Trump did not identify a specific fuel-price target in the executive order, instead relying on the broader national-interest justification permitted by Congress.

Canadian Steel Continues Facing 50% U.S. Import Duties

While Trump suspended the new Russia-related penalties, substantial tariffs remain in place on Canadian steel entering the United States. Washington originally increased its Section 232 steel tariff from 25% to 50% in June 2025. The administration subsequently revised its metal tariff framework in April 2026, maintaining a 50% rate on many covered steel products and applying duties to their full customs value rather than only the steel content. The American government has justified these restrictions through national-security concerns and its objective of expanding domestic metal production.

Not every Canadian product containing steel faces exactly the same rate. Different categories of manufactured goods can qualify for lower duties, exemptions or special treatment under subsequent tariff proclamations. Nevertheless, the 50% charge remains an important barrier for Canadian steelmakers supplying American customers. Unlike the Russia-related tariffs suspended under the Graham Act, the steel duties operate through Section 232 of the Trade Expansion Act of 1962. Suspending one set of measures does not legally alter the other. Canadian producers therefore continue navigating significant trade restrictions despite the administration’s decision to delay additional economic pressure on Russia.

Canadian Steel Exports Have Fallen Sharply Since the Tariff Increase

The financial consequences for Canada’s steel industry are substantial. Before the latest trade conflict, the United States purchased approximately 90% of Canadian steel exports, making American customers essential to the industry’s operations. According to the Canadian Steel Producers Association, shipments to the United States fell by approximately 60% during the tariff disruption. In June 2026, the association told a parliamentary committee that more than 1,000 workers had already lost their jobs. The sector contributes roughly C$15 billion in economic activity and supports approximately 123,000 direct and indirect jobs, according to the industry group’s estimates.

The disruption is particularly serious in manufacturing communities where steel production supports much more than factory employment. In Sault Ste. Marie, Algoma Steel issued approximately 1,050 layoff notices as it accelerated the transition away from its blast furnace and coke-making operations. The company identified U.S. tariffs and deteriorating market conditions among the pressures influencing that decision. Those job reductions also reflect a technological transition, so they should not be attributed exclusively to tariffs. Nevertheless, reduced access to American customers has forced steelmakers to reconsider production strategies, investment plans and the markets they can realistically serve.

Stelco’s 500 Job Cuts Bring Canada’s Steel Crisis Into Focus

Another major confrontation is unfolding in Hamilton, Ontario, where Stelco’s American parent company, Cleveland-Cliffs, is facing federal government opposition over plans to eliminate up to 500 Canadian jobs. The dispute centres on commitments made when Cleveland-Cliffs acquired Stelco in 2024. As part of Canada’s approval under the Investment Canada Act, the company agreed to maintain specified employment levels and make investments supporting its Canadian operations. Ottawa argues that the proposed workforce reductions raise serious questions about whether those undertakings are being respected. Cleveland-Cliffs has defended its decisions by pointing to deteriorating market conditions and financial pressures.

On October 16, Industry Minister Mélanie Joly confirmed that Ottawa was examining available legal options, including the possibility of nationalizing Stelco. She pointed to provisions of the Investment Canada Act that allow the government to seek enforcement of investment commitments through the courts. No nationalization has been completed or ordered. The dispute demonstrates how tariffs can become entangled with foreign investment obligations, corporate restructuring and regional employment. For workers in Hamilton, the immediate concern remains whether their jobs can be preserved as political leaders and company executives debate the future of the steelmaker.

Canadian Steelmakers Are Finding New Opportunities in Their Domestic Market

Despite the enormous disruption to American exports, there are signs that Canada’s steel industry is beginning to adapt. According to calculations by the United Steelworkers union, domestically produced steel accounted for 51% of steel consumed in Canada in 2025, up from 41% in 2024. The increase suggests Canadian suppliers are gaining a larger share of their home market as manufacturers, construction companies and industrial customers reconsider their purchasing decisions. Meanwhile, the Organisation for Economic Co-operation and Development estimated that Canadian steel demand increased approximately 2.7% in 2025, with a further 0.9% increase projected for 2026.

Much of the emerging demand is connected to major projects in Western Canada, including energy developments, mining operations and data-centre construction. These projects require steel for structural supports, pipes, processing facilities and related infrastructure. However, the shift toward domestic customers cannot immediately replace the American market. Canada’s steel industry was built around cross-border trade, and the domestic economy cannot absorb unlimited production. Producers also face competition from imported steel, including suppliers operating in countries with lower production costs. The recovery therefore remains uneven, even as new Canadian projects offer opportunities.

New Steel Investments Show Some Manufacturers Are Adapting Successfully

Tenaris provides an example of how investment in specialized products could help Canadian steel manufacturing become less dependent on U.S. customers. The company announced a C$305.9-million modernization project at its Sault Ste. Marie Industrial Centre in May 2026, supported by a C$76.2-million federal contribution and additional provincial assistance. The investment focuses on improving production capabilities for steel pipes used in the energy sector. By producing more sophisticated products domestically, Tenaris aims to serve Canadian oil and gas operators while strengthening local manufacturing capacity and supply chains.

The company has also introduced domestic production of its TN 95EY steel grade, designed for demanding oil and gas applications involving high pressure, elevated temperatures and challenging underground conditions. The product is intended for Canadian energy developments, including activity in the Montney and Duvernay formations. Tenaris reported employing more than 1,300 people across its Canadian operations and investing over C$355 million in the country since 2020. These developments contrast with the difficulties facing other Ontario steel facilities. They demonstrate that some manufacturers can respond to trade barriers by developing specialized products and cultivating domestic demand, although investment success depends on sustained orders and competitive operating conditions.

Ottawa Is Responding With Counter-Tariffs and Billions in Business Support

The Canadian government has adopted a combination of retaliatory tariffs, financial assistance and domestic procurement policies to protect industries affected by American trade restrictions. On September 8, Ottawa introduced additional counter-tariffs ranging from 15% to 50% on selected U.S. products, covering approximately C$27.6 billion in imports. Certain American steel and aluminum products previously facing 25% Canadian tariffs became subject to 50% duties. The federal government also announced a C$7.5-billion package of new and enhanced support measures, including financing for struggling businesses, investment assistance and programs designed to help displaced workers find employment.

Earlier in May, Ottawa established a C$1-billion Business Development Bank of Canada loan program for companies affected by steel, aluminum and copper tariffs, alongside C$500 million in additional regional development funding. Federal procurement policies also encourage greater use of Canadian materials in public infrastructure projects. However, these measures cannot guarantee that every affected company will remain profitable or maintain its workforce. Retaliatory tariffs can protect domestic market share, but they also introduce costs for Canadian businesses purchasing American products. The challenge is supporting vulnerable manufacturers without creating additional difficulties for industries that depend on cross-border supply chains.

Ukraine Condemns Trump’s Waiver as Russia Welcomes the Decision

Trump’s decision has generated sharply different reactions internationally. Ukrainian President Volodymyr Zelenskyy criticized the suspension of sanctions, warning that reducing economic pressure could encourage Russian President Vladimir Putin to continue military operations. Zelenskyy argued that the decision risks weakening international efforts to end the war. His comments followed renewed Russian attacks on Ukrainian energy infrastructure, including strikes he said affected more than 15 power generation and transmission facilities. For Ukraine, restrictions targeting Russian financial institutions, energy revenues and international trade are intended to make continued military aggression more costly.

Russian investment envoy Kirill Dmitriev, meanwhile, welcomed the waiver, describing it as a historically significant development for relations between Moscow and Washington. American lawmakers have also criticized Trump’s decision, including Democratic Representative Don Beyer, who argued that suspending the measures undermines congressional efforts to punish Russia. These reactions underline the diplomatic significance of the announcement. However, it is important to distinguish the waiver of newly authorized sanctions from the cancellation of every existing restriction on Russia. The executive order expressly preserves certain previously established sanctions, and Washington retains the legal ability to reconsider its waiver.

Canada’s Steel Industry Still Needs a Lasting Trade Agreement With Washington

For Canadian steelmakers, the most important unresolved issue is whether Washington will eventually reduce or eliminate the tariffs restricting access to American customers. That question has become more complicated because the Canada-United States-Mexico Agreement remains under review. During the agreement’s first joint review on July 1, 2026, the United States declined to approve an extension of its existing terms. The agreement remains in force, with its current term extending to 2036, but the decision triggered a process of continuing annual reviews. Canada has identified resolving sector-specific tariffs on steel, aluminum, automobiles and lumber as a central negotiating priority.

Recent developments suggest that securing concessions may prove difficult. Reports published October 16 indicated that U.S.-Mexico negotiations over steel, aluminum and automobile tariffs had slowed because of disagreements within the American administration about lowering existing duties. Those discussions do not determine Canada’s negotiating outcome, but they demonstrate Washington’s continued commitment to protecting selected domestic industries. Meanwhile, Canadian steel producers are expanding their focus on domestic construction, energy and infrastructure customers. Trump’s Russian tariff waiver shows that American trade restrictions can be suspended when the administration chooses to exercise available legal authority. It does not, however, signal an equivalent policy change for Canadian steel. Until Washington changes those duties or a broader agreement addresses them, Canadian manufacturers will continue balancing the need to preserve American market access against the growing importance of building a stronger domestic customer base.

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