Canada — In response to potential tariffs imposed by the United States on aluminium imports, Quebec Premier Francois Legault has suggested that Canada considers implementing export taxes on aluminium as a negotiating tactic.
This proposal comes in the wake of President Donald Trump’s executive order that could significantly impact Canadian producers.
Canada’s 2024 trade balance in steel and aluminium was C$14 billion ($15.49 billion), with aluminium contributing C$11 billion ($12.17 billion).
The US market is crucial for Canadian producers, accounting for over 90 per cent of aluminium-related exports, valued at C$15.9 billion ($17.60 billion) in 2024, according to Statistics Canada.
The potential tariffs, authorised under Section 232 of the Trade Expansion Act, aim to bolster US production and create jobs, according to President Trump.
However, concerns are mounting about the potential repercussions for both Canadian and US industries.
Jean Simard, CEO of the Aluminum Association of Canada, noted that nearly 4 per cent of Quebec’s manufacturing payroll is tied to the aluminium industry.
Simard suggested that Quebec’s production could be redirected to Europe if higher prices impact US demand.
However, the US Chamber of Commerce is warning of the negative consequences for American manufacturers.
John G. Murphy, an executive at the Chamber, stated that the tariffs would harm the competitiveness of American manufacturers.
He emphasised that the number of US workers who would benefit from the tariffs is significantly outweighed by those employed in downstream industries who would be negatively affected.
“The number of American workers who would stand to benefit from a 25 per cent tariff on aluminium imports are outnumbered 177-to-1 by American workers employed in downstream industries who would be harmed by the tariffs,” Murphy stated in a social media post.
He highlighted that approximately 10.7 million workers are employed in industries that rely on aluminium.
Murphy also contested the legal basis for the tariffs, stating: “The legal claim behind these Sec. 232 tariffs that aluminium imports from Canada ‘threaten to impair the national security’ of the US is wrong.”
Nathan Janzen, assistant chief economist at the Royal Bank of Canada, pointed out that US companies often bear the brunt of such tariffs, especially in specialised sectors where alternative suppliers are difficult to find.
