Steel workers work at the ArcelorMittal Dofasco steel plant in Hamilton, Ont., on March 12.Nathan Denette/The Canadian Press
Much of Canada’s mining sector is breathing easier, after U.S. President Donald Trump largely spared it from new reciprocal tariffs, while the domestic steel and aluminum industries continue to face his wrath.
Mr. Trump on Wednesday signed an executive order that will levy 25-per-cent tariffs on Canadian imports that aren’t compliant with the U.S.-Mexico-Canada Agreement. Energy, potash and U.S. classified critical minerals imports that don’t comply will be subject to a 10-per-cent levy. Non-USMCA-compliant goods, however, represent only a small proportion of Canada’s trade with its biggest trading partner.
For most Canadian goods that are USMCA-compliant, Mr. Trump didn’t impose any new import tariffs, effectively sparing broad swaths of the Canadian economy for now, including the mining sector.
“The sky didn’t fall today,” Pierre Gratton, president of the Mining Association of Canada, said in an interview.
“I think the new administration has started to understand better how interconnected we are.”
Globe economics reporter Mark Rendell says Wednesday’s tariff announcement by President Donald Trump saw Canada not hit as hard as predicted, but that the trade war has now gone global.
Canadian politicians did a stellar job of convincing the U.S. of the huge damage that could have resulted from imposing tariffs on Canada’s mining sector, including critical minerals, he added.
Apart from the auto sector, which Mr. Trump confirmed will be hit by a 25-per-cent tariff, much of the Canadian economy was exempt from a massive new round of international reciprocal tariffs announced on Wednesday. Many other countries that Canada competes against in metals and mining were hit with either the minimum 10-per-cent levy, or in some cases a significantly higher tariff. Owing to this new international trade dynamic, Canada’s mining sector should be better positioned to win business in the U.S. market, Mr. Gratton said.
“We can get to zero tariffs through CUSMA,” Mr. Gratton said, calling the trade agreement by its abbreviated Canadian name. “So we’re ahead.”
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A knock-on effect will be a huge amount of paperwork that many Canadian companies will have to file to prove USMCA compliance. A lot of companies have not previously completed the paperwork, Mr. Gratton said, noting that the tariff threat provides an incentive that didn’t exist before.
For the Canadian steel and aluminum industries, which have already been subject to U.S. import tariffs of 25 per cent since March 12, the continued targeting of their sectors stings. But there is also a recognition that it could have been worse, given Mr. Trump’s inherent unpredictability. Some had feared that both industries might have ended up with an added reciprocal tariff on top of things.
“We’re relieved that the tariffs did not stack,” said Michael Garcia, chief executive of Sault Ste. Marie, Ont.-based Algoma Steel Group Inc.
With some clarity for the immediate future, Mr. Garcia wants the Canadian government to double down on its efforts to campaign for the removal of existing steel tariffs. In the meantime, Algoma ASTL-T, which is Canada’s last remaining independent steelmaker, is pushing to win more business in its home market. It currently sends about half of the steel it produces to the U.S. market.
“We’ll just continue to be very deliberate, very careful, focus on Canada, and be careful about our U.S. business.”
While much of Canada’s mining industry is relieved at being excluded from new tariffs, some sectors are still bracing for a possible hit.
Mr. Trump in his executive order said that copper was exempt from tariffs for now, but he indicated it could be hit with a levy in the future, pending further investigation.
“On copper we don’t know yet, “ Mr. Gratton said. “It’s still being studied.”