Canada has left the door open to raising tariffs on U.S. steel and aluminum products next month if trade talks with the Trump administration reach an impasse.

A statement released on Thursday showed that the Canadian government "will adjust its current counter-tariffs on steel and aluminum products on July 21 to match the progress made in the overall trade agreement with the United States."

The United States imposes a 50% tariff on foreign imports of steel and aluminum, while Canada currently imposes a 25% counter-tariff on U.S.-made steel and aluminum products. But the two countries are currently negotiating a trade agreement with a tentative deadline of mid-July.

"We will certainly continue to negotiate in good faith," Canadian Prime Minister Mark Carney said at a news conference. "At the same time, we must strengthen our position to protect Canadian workers and businesses from the current unfair tariffs imposed by the United States."

Canadian Prime Minister Mark Carney and Dominic LeBlanc, Canada's minister responsible for Canada-U.S. trade

The Canadian government will also introduce new rules for federal projects to limit them to steel and aluminum produced in Canada or "reliable trading partners," according to the statement. These "reliable trading partners" must provide reciprocal market access through trade agreements.

Canadian steelmaker Algoma Steel Group Inc. rose 7.9% to C$9.85 in Toronto at one point on the news, hitting its highest intraday level since March 5, before giving up gains.

Canada is setting new tariff quotas to limit imports from countries without trade agreements - and plans to take new tariff measures within weeks to address the risk of steel and aluminum dumping. The Canadian government is concerned that the Trump administration's 50% tariff on metal imports will cause global manufacturers to relocate to Canada.

Carney told reporters the new quotas were not a U.S. request during trade talks but were “the result of U.S. actions.”