The global trade landscape is undergoing a period of pronounced disruption, largely driven by strategic realignment following the Russo-Ukrainian War and subsequent geopolitical tensions. Within this context, Canada’s approach to the G20 Trade and Investment Ministerial Meeting in Gqeberha, South Africa, in October 2025, offers a critical case study in navigating complex trade relationships and proactively addressing emerging economic challenges. The meeting underscored a key preoccupation: the persistent global excess of steel production capacity and the ramifications for industries worldwide, including Canada’s vital steel sector.
The core issue revolves around a fundamental imbalance. Following decades of investment in steel production, particularly in China, the Global Forum on Steel Excess Capacity (GFSEC) – itself a G20 initiative – has documented a sustained oversupply. According to data compiled by the OECD, steel overcapacity, particularly in China, accounts for approximately 300 million tonnes annually, exceeding global demand by a considerable margin. This surplus artificially depresses prices, undermining the competitiveness of steel producers in nations like Canada and impacting downstream industries reliant on steel – automotive, construction, and manufacturing. The GFSEC itself, comprised of nations heavily impacted by this overcapacity, represents a significant, if somewhat fractured, bloc seeking coordinated solutions.
Canada’s strategy, as articulated by Minister of International Trade Maninder Sidhu, focused on “deepening partnerships and fostering new ones,” specifically among “reliable partners who share our commitment to fair and open competition.” This sentiment reflects a cautious approach, acknowledging the need for multilateral solutions but prioritizing bilateral engagements to mitigate immediate economic damage. Canada’s commitment to the GFSEC, while seemingly supportive of coordinated action, is tempered by a recognition that achieving a consensus among nations with divergent economic and strategic priorities—particularly China—is exceptionally difficult. The South African market, as Canada’s largest trading partner in Africa, presents a comparatively stable avenue for export diversification, representing a tangible objective within this broader strategy. Two-way merchandise trade between the nations totaled $2.91 billion in 2024, highlighting a relationship with significant potential.
However, the underlying tensions remain. China, the primary driver of the steel surplus, continues to resist meaningful constraints on its production capacity, driven largely by domestic industrial policy objectives and state-backed investment. This resistance is reinforced by nationalistic economic narratives. The EU has also been slow to enforce existing trade regulations, largely due to complex internal negotiations and competing economic concerns. Furthermore, the broader global economic slowdown, characterized by reduced demand for manufactured goods across many sectors, exacerbates the challenge. Investment in new steel production capacity has been largely curtailed, but the existing oversupply remains a persistent drag on global prices.
The situation is further complicated by evolving geopolitical alliances. The G20’s effectiveness is increasingly challenged by a fragmentation of shared economic governance. Nations like Brazil and India, possessing substantial steel production capabilities themselves, are increasingly asserting their own strategic interests, rather than aligning strictly with the demands of the GFSEC. This trend contributes to a more decentralized and competitive landscape, making coordinated solutions even more elusive. Minister Sidhu’s emphasis on “fostering new partnerships” hints at a broader recalibration of Canada’s trade relationships, moving beyond traditional alliances towards nations seeking alternative trade routes and supply chains.
Looking forward, the next six months are likely to see continued volatility in global steel markets, with prices remaining suppressed and Canadian exports facing ongoing pressure. Long-term, the outlook hinges on several uncertain factors. A sustained global recession would further depress demand, while a coordinated, though potentially difficult to achieve, international agreement on steel production quotas would offer the most significant long-term stabilization. Canada’s ability to diversify its export markets—specifically within Africa and potentially Southeast Asia—will be crucial. The success of this strategy will depend not simply on favorable exchange rates, but also on the ability of Canadian industries to adapt to a fundamentally altered global trade environment. The next decade will likely see Canada’s role within the G20 fundamentally shaped by its ongoing management of this steel surplus, and its willingness to embrace more agile and strategically distributed trade relationships. Ultimately, Canada’s position within the global trade arena will be a test of its ability to navigate a world increasingly defined by competing geopolitical ambitions and economic uncertainties.