By Ian Bickis in Toronto

Canada's steel industry needs the federal government to take swift action as it faces an existential threat from the steeply increased tariffs imposed Wednesday by the U.S., said Catherine Cobden, head of the Canadian Steel Producers Association.

"We're going to be a deeply weakened sector in a very short period of time," she said in an interview.

The U.S. doubling of tariffs on steel and aluminum to 50 per cent not only makes Canadian exports to the country not work, but will also mean Canada's domestic market could be flooded by imports from other countries also shut out of the U.S., said Cobden.

"We're going to be inundated with steel that was destined for the United States diverting into Canada. We already have an unfair trade problem here, so it's going to get much worse very, very quickly."

The industry association is calling on the federal government to expand an existing 25 per cent tariff on metal products finished in China to also include products from other countries made from steel that was melted and poured in China. The industry has long alleged that the Chinese government unfairly supports its industry to create artificially low prices.

By reducing imports into Canada, producers here can recapture some of the domestic market, said Cobden.

"There'll still be shrinkage in the industry, we'll be weaker, but we won't be, you know, collapsed, which is where I'm afraid we're heading."

Prime Minister Mark Carney said Wednesday on his way into the weekly Liberal caucus meeting in Ottawa that Canada is deep in talks with the U.S. on trade, and is still considering its response to Trump's latest escalation.

"We will take some time — not much, some time — because we are in intensive discussions right now with the Americans on our trading relationship."

Industry players had hoped to get a last-minute reprieve on the U.S. metals tariffs, but when that didn't happen it sent companies scrambling, she said.

“Steel was already ready and loaded, locked and loaded, and some of it even in transport, so, completely chaotic.”

The aluminum industry is also being disrupted by the increased tariffs, though the higher price per kilogram of the metal makes it more economic to ship abroad.

The Aluminum Association of Canada said it strongly opposed the move, which effectively makes Canadian exports to the U.S. economically unviable, and that industry players may be forced to diversify trade toward the European Union.

The heightened tariffs will mean less demand across North America and threatens the security of the integrated supply chain, said Jean Simard, president and CEO of the association.

“It will impact workers on both sides of the border and disrupt key sectors including defense, construction and automotive," he said in a statement.

Industry players and unions are set to meet Thursday in Ottawa to discuss their response and how they're going to press Ottawa for action, said Cobden. 

Unifor said in a release Wednesday that heightened tariffs on steel and aluminum are a direct threat to Canadian jobs and security, and also urged the federal government to act without delay to defend the industry.

“These tariffs are killing investment in our steel, aluminum, and auto sectors, and we are already seeing the consequences in lost jobs and economic instability,” said Unifor national president Lana Payne in a statement.

“We need immediate and forceful action to defend good jobs and safeguard our national economic security.”

Cobden said that even under the 25 per cent tariffs imposed since March 12, the Canadian industry has lost about 700 jobs, while the 50 per cent tariffs from a market where half of Canadian production goes is going to be devastating.

She said the government's recent commitment to buy Canadian steel for infrastructure and defence projects is welcome, but more needs to be done.

“We applaud that, we've been looking for that for decades, but now we have the circumstance where we might not be around to serve those projects."

— With files from David Baxter in Ottawa.

(C) The Canadian Press