Oops, he did it again. On late Friday, U.S. President Donald Trump vowed to hike his steel and aluminum imports, throwing fresh uncertainty into the world of global trade.
This morning we’ll dig into the winners and losers of the latest tariff action, as well as looking at why Trump may have chosen now to sow new chaos in markets. But first, today’s news:
In the news
More taxes: Lawyers say the Shopify court ruling could set a precedent, potentially making it tougher for the CRA to crack down on businesses that don’t remit taxes
Artificial intelligence: Will AI go rogue? Noted researcher Yoshua Bengio launches venture to keep it safe
Real estate: No bids were received for 62 Hudson’s Bay properties, creating a new problem for landlords across Canada: millions of square feet of empty space
In the know
Prime Minister Mark Carney’s big meeting day
- First ministers: Carney has released a list of criteria for projects his government wants to fast-track in the national interest after meeting with premiers, but stopped short of identifying specific proposals that will be prioritized.
- Energy: Carney tells energy chief executives how infrastructure projects in national interest will be assessed. The goal? To figure out how to work toward the pledge to make Canada an energy superpower.
Machinery and workers are seen at Algoma Steel Inc., in Sault Ste. Marie, Ont., on April 25.Sean Kilpatrick/The Canadian Press
In focus
Steeling for a new trade battle
Starting tomorrow, the United States will double steel and aluminum tariffs to 50 per cent. At least that’s what Donald Trump told workers during a rally at a steel mill near Pittsburgh late Friday.
Like so much of Trump’s on-again, off-again trade policies, a last-minute reprieve may come, but as it stands the tariff hike is promising fresh chaos, particularly for Canada’s steel sector.
The winners: Not surprisingly, this isn’t a very long list.
Against a U.S. stock market that languished once it had a chance to digest the latest tariff turmoil, shares in U.S. steel and aluminum companies skyrocketed Monday as prices for the metals climbed in anticipation of the new tariffs:
- Cleveland-Cliffs Inc.: up 23.2 per cent
- Nucor Corp.: up 10.1 per cent
- Steel Dynamics Inc.: up 10.4 per cent
The losers: Where, oh where to begin?
Investors expect higher metals prices will drive up costs for manufacturers. Shares in both General Motors Co. and Ford Motor Co. fell around 4 per cent.
Other U.S. companies that consume steel and aluminum are also set to take a hit, from can makers to appliance manufacturers to the construction sector.
But while other trade partners such as China, Brazil and parts of Europe will also be affected, Canada is arguably the biggest loser. We’re the largest supplier of both commodities to the United States (roughly one-quarter of U.S. steel imports and more than 40 per cent of aluminum imports).
If Trump follows through on his threat, it would make Algoma Steel’s U.S. business “commercially unviable” unless steel prices more than double, according to Michael Garcia, chief executive of the steelmaker based in Sault Ste. Marie, Ont.
Algoma Steel on April 25, 2025.Sean Kilpatrick/The Canadian Press
Have foot, will shoot it off
What makes Trump’s latest steel and aluminum tariff threats all the more maddening is the bounty of evidence that the strategy was such a self-defeating dud during his first term.
Back then, Trump loved to claim that he’d saved the steel industry from certain death. (As a reminder, in 2018 Trump slapped a 25-per-cent tariff on steel and 10 per cent on aluminum, but lifted the duties on imports from Canada and Mexico a year later.)
Trump claimed U.S. Steel was going to build six new steel mills, while he insisted other shuttered mills were restarting. Very little of that promised new activity happened. Case in point: Trump bragged the Republic Steel mill in Lorain, Ohio, would soon bring back 1,000 jobs; today it sits rusting and empty, overgrown with vegetation.
Sure, some new steel capacity came online, but at a steep cost. An analysis by the Peterson Institute found that the 2018 tariffs delivered US$270,000 in profits to the steel industry for each job saved, but cost steel-using industries US$650,000 for each steel job saved.
Yet, once again, Trump is promising that “our steel and aluminum industries are coming back like never before.”
A time for big threats
It’s hard to separate the timing of the tariff hike from other events swirling around Trump and his trade wars – events that have not been going his way.
Last week the President was asked about the so-called “TACO trade” lighting up Wall Street. That would be the acronym for Trump Always Chickens Out – the idea that in the face of market turmoil, Trump backs down from his most extreme tariff tendencies. The “nasty” question left him seething.
So did a U.S. trade court ruling that said Trump didn’t have the authority to impose his “Liberation Day” tariffs on the world or his fentanyl tariffs on Canada, Mexico and China.
A federal appeal court later allowed the tariffs to stay in place while it considers a challenge from the White House.
The trade court ruling didn’t apply to the steel and aluminum tariffs. But if Trump’s tariff threats are going to be a useful negotiating tactic to bully countries into signing favourable trade deals, he desperately needs those threats to mean something.
Charted
Waiting for clarity
With U.S. trade policy seemingly changing from week to week, it’s no surprise a record number of corporate earnings calls include the phrase “wait and see.” “We’re going to have to wait and see what ultimately transpires around tariffs,” Christopher Boerner, CEO of pharmaceutical giant Bristol-Myers Squibb Co., said during a May 28 investor conference. Likewise, Preston Wigner, CEO of U.S. tobacco company Universal Corp., told investors on Monday, “Tariffs are off, tariffs are on, tariffs are stayed. We’re just going to wait and see.”
Bookmarked
On our reading list
For the love of God: Can someone please help CRA fix its website?
For the love of AI: Some university professors say students should learn how to use AI.
For the love of shopping: Temu loses more than half its daily U.S. users.
Morning update
Global markets were mixed as erratic U.S. trade policies clouded market sentiment and investors turned defensive ahead of key developments later in the week.
Overseas, the pan-European STOXX 600 was down 0.17 per cent in morning trading. Britain’s FTSE 100 edged higher 0.08 per cent, Germany’s DAX rose 0.15 per cent and France’s CAC 40 dropped 0.26 per cent.
In Asia, Japan’s Nikkei closed 0.06 per cent lower, while Hong Kong’s Hang Seng rose 1.53 per cent.
The Canadian dollar traded at 72.85 U.S. cents.
Editor’s note: Yesterday’s newsletter incorrectly stated that the federal court ruled that Shopify Inc. must hand over six years’ worth of data for its Canadian merchants. The ruling stated that Shopify is not obligated to provide its merchants’ data.