Canada will reduce the amount of foreign steel that importers can bring in tariff-free, a move to help domestic producers suffering from US President Donald Trump’s levies on the sector.

Mexican President Claudia Sheinbaum said on Wednesday that she had spoken with Canadian Prime Minister Mark Carney and that the two had agreed to strengthen trade collaboration, particularly in light of the tariffs from U.

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.