U.S. Treasury Secretary Scott Bessent at a July 29 press conference in Sweden after concluding the latest round of trade talks with China. Mr. Bessent says he's working on metals tariffs on Canada, acknowledging the impact on the U.S. auto sector.Magnus Lejhall/TT/Reuters
U.S. Treasury Secretary Scott Bessent is signalling that the United States is willing to work with Ottawa on punishing metals tariffs that are hammering Canadian and U.S. aluminum and steel producers.
In June, U.S. President Donald Trump doubled the tariff on global imports of aluminum and steel to 50 per cent, citing national security concerns over the U.S. not producing enough of the metals domestically.
Dearborn, Mich.-based Ford Motor Co. F-N earlier this week said that tariffs cost it US$800-million in its second quarter, with levies on Canadian steel and aluminum accounting for a significant portion of the hit.
The body of Ford’s F-150 pickup truck, one of the biggest-selling vehicles in the U.S., is made from military-grade Canadian aluminum manufactured in Quebec.
Speaking on CNBC on Thursday, Mr. Bessent said he is aware that Ford’s F-series trucks are manufactured from aluminum.
“I think maybe the aluminum tariffs hit them harder,” he said of the damage to Ford’s bottom line. “We will be negotiating with Canada on those.”
Mr. Trump on Thursday evening signed an executive order raising tariffs on Canada to 35 per cent from 25 per cent for goods that are traded outside the United States-Mexico-Canada free trade agreement. The majority of trade between Canada and the U.S. is covered by USMCA. The separate metals tariffs were unchanged.
Prime Minister Mark Carney had targeted Aug. 1 to reach a broader trade agreement with the U.S., but had cautioned that a tariff-free pact was unlikely, and had indicated the timeline to reach a deal could be pushed out.
Trump raises tariffs on some Canadian goods to 35%
While Mr. Trump has recently reached preliminary trade deals with several countries and trading blocs, including the European Union, pacts with dozens of other nations have not yet materialized. Mr. Trump on Thursday extended his existing tariffs on Mexico by 90 days as trade talks between the two countries continue.
The U.S. President has recently backed down from some of his earlier trade threats. After indicating he would impose levies on the entire global copper industry, on Wednesday he limited new tariffs to only some copper products, such as pipes, wires and rods. Mr. Trump spared broad swaths of the industry, including mines that extract copper concentrate, as well as producers of anodes, cathodes and semi-processed materials.
Jim Ritchie, owner of Vancouver-based metals distribution company Cascadia Metals Ltd. said that the development is a “net win for Canada.”
“It is however still a hardship for American manufacturing, as now they will have to pay higher prices for finished copper products, either because of the 50-per-cent tariff or higher domestic prices,” said Mr. Ritchie.
Explainer: What are the current tariffs between Canada and the U.S.?
The existing Trump tariffs on aluminum and steel, which were originally imposed in March, have taken a heavy toll on both sides of the border.
Canadian steelmaker Algoma Steel Group Inc. is seeking around $500-million in funding from Ottawa to bolster its finances after more than four months of U.S. tariffs, and this week suspended its dividend to preserve cash.
U.S. aluminum producer Alcoa Corp., which operates three smelters in Quebec, incurred US$115-million in tariff costs in the second quarter. Since the start of the trade war, Bill Oplinger, the company’s chief executive officer, has argued that Mr. Trump’s dreams of building new U.S. smelting capacity aren’t realistic, and that the Canadian and the U.S. aluminum industries are far too interconnected to break apart. He told The Globe and Mail last week that he was seeking a carve-out for Canada in aluminum tariffs.
The U.S. on Wednesday set the import duty for a range of copper products at 50 per cent starting Aug. 1, citing the need to bolster the country’s manufacturing sector.
Pierre Gratton, president of the Mining Association of Canada, said that by being exempted from tariffs, copper miners are in a similar position to iron ore, nickel and metallurgical coal companies that produce inputs for steel companies.
“Our end of the business is largely untouched,” Mr. Gratton said.