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.

After long insisting that Canada could avoid Trump tariffs through talks, Mark Carney now says that is unlikely for any nation.

The trade relationship between the United States and Canada, historically one of the world's closest and most extensive, has become a focal point under President Donald Trump's 'America First' policy.

Prime Minister Mark Carney said any future trade deal with the United States could include quotas on Canadian softwood lumber exports, a sector that has been a sore point in cross-border trade relations long before US President Donald Trump's trade war.

“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” Canadian Finance Minister François-Philippe Champagne said in a statement Sunday night.

Canada is one of the United States' top trading partners, with more than $410 billion of goods crossing into the country last year.

The trade relationship between the United States and Canada, historically robust, faces challenges due to aggressive tariff policies. The USMCA has not fully shielded Canada from U.S. tariffs, leading to reciprocal measures and legal battles.

Prime Minister Mark Carney is expected to announce support for the Canadian steel industry, which has been clobbered by U.S. President Donald Trump's tariffs, at an event in Hamilton, Ont., later this morning.