Trump’s Tariffs on Canadian Steel, Aluminum to Hurt US Companies

US President Donald Trump announced that his administration will double existing tariffs on Canadian steel and aluminum imports to 50%, effective March 12, 2025. This action is a response to Ontario's implementation of a 25% tariff on electricity exports to the United States. Canadian experts believe these tariffs, alongside others proposed, could disproportionately impact US companies due to their reliance on Canadian raw materials. 

Trump also condemned Canada's broader trade policies, highlighting what he described as excessively high tariffs on US agricultural products, ranging from 250% to 390%. He stated that the United States would recoup these costs through reciprocal tariffs. He also labeled Canada a "Tariff abuser" and threatened to impose significantly higher tariffs on Canadian automobile imports by April 2, 2025, aiming to shift production to the United States. “I will substantially increase the tariffs on cars coming into the United States which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!” Trump posted on Truth Social.  

Beyond trade, Trump criticized US funding of Canadian national security, estimating it at over US$200 billion annually. He suggested that Canada become the 51st US state, arguing this would eliminate tariffs, lower Canadian taxes, and improve security, as reported by MBN.

Tariffs and Mining Market Reactions

Many experts have stressed that Trump’s tariffs are more likely to impact US businesses and consumers rather than those exporting to the United States. However, they are still expected to impact extractive industries like mining. According to Jim Stanford, Economist and Director, The Centre for Future Work, most Canadian exports to the United States are unfinished inputs that US businesses use in their production. He says that tariffs would increase the costs of these inputs, including raw materials, supplies, parts, and semi-finished goods, reducing the competitiveness of US firms.

On Feb. 26, 2024, MBN reported that copper prices in the United States rose following Trump's decision to initiate an investigation into potential tariffs on copper imports. May copper futures, the most actively traded contract on the US COMEX, increased by 3.8% to US$4.7/lb, after reaching an eight-and-a-half-month high on Feb. 13, 2025. However, given the United States' reliance on copper imports and limited domestic refining capacity, experts believe these tariffs would be detrimental. "The United States has no chance of beefing up their own production and refining capacity anytime soon, so this looks like another own goal," says Ole Hansen, Head of Commodity Strategy, Saxo Bank. 

Despite increases in metal prices like copper and gold, companies are urged to evaluate their cost structures to review if their supply chains can be shortened, or sourced entirely locally. “Tariffs will increase costs for everyone, from consumers to businesses, driving a shift toward national sourcing. Companies already positioned for local sourcing will have some protection against these impacts, although not everything can be sourced domestically,” says Jason Simpson, President and CEO, Orla Mining.

During the Mexico Mining Forum PDAC 2025, Canada’s Ambassador to Mexico Cameron Mackay said tariffs are a wakeup call for Canada and Mexico, the United States’ main trading partners. “The tariffs, while problematic, offer us an opportunity to rethink and diversify our relationships, creating new opportunities for Canadian businesses in Mexico and vice versa. We must take the chance to modernize and increase foreign investment in key sectors like mining and energy while ensuring we are investing in sustainability and long-term strategies,” he said. Mackay added that both countries are rich in strategic minerals that are crucial for global supply chains, especially for sectors like renewable energy, technology, and infrastructure.

Update: Premier Doug Ford has halted the province's 25% electricity export surcharge after discussions with US Secretary of Commerce Howard Lutnick. Ford and Lutnick are scheduled to meet in Washington to address matters related to the USMCA.

Following this development, White House trade adviser Peter Navarro announced that former President Trump has withdrawn his plan to double tariffs on Canadian steel and aluminum. However, the US government will proceed with the previously announced 25% tariff on all steel and aluminum imports.