Which country will be most affected by Trump's tariffs on steel and aluminum?

Just a few days after easing tariffs on Canada and Mexico, President Trump stunned trade watchers by applying a comprehensive package of tariffs on imported steel and aluminium.

He announced that all steel and aluminium imports into the US would face a hefty 25 per cent tariff during a trip to New Orleans for the Super Bowl.

With uncertainty looming, it has become evident that Canada will bear the worst punishment of these tariffs due to strong economic ties with the US.

The shortsighted nature of Canada’s reliance on US markets

According to Statista, the available trade figures show that Canada is in a precarious position in this shifting trade environment.

In 2024, Canada accounted for 23% of US steel thermal imports and nearly 60% of US aluminum imports.

With approximately 90% of Canada’s steel and aluminum exports directed to the US, the risks to Canadian manufacturers and workers are significant.

Should US corporations seek alternative suppliers, Canada’s steel and aluminum industries—critical to the national economy—could face severe consequences, impacting jobs and economic stability.

American importers may offset the duty by obtaining materials from low-cost producers like China, potentially leading to employment losses for thousands of Canadian workers.

Impact on employment and economy

The first effect of the tariffs is expected to be job losses in Canada. Manufacturing sectors, particularly in provinces like Quebec where much of the aluminum industry is based, could suffer considerable slumps, experts predict.

Bolstering operations may prove difficult for employers as costs increase and demand from their biggest trading partner continues to decline.

Canada's Innovation, Science, and Industry Minister, François-Philippe Champagne, stated:

Job losses in Canada could impact industries in the US that rely on Canadian resources due to the economies' interdependence.

A quieter approach to trade relations

Especially with these tariffs, the importance of stable and collaborative trading relations should be emphasized.

Quebec exports 2.9 million tons of aluminum to, that is, 60% of their needs. Do they prefer to get supplies from China?" Francois Legault, premier of Quebec, said on X.

"All this shows that we must begin to renegotiate our free trade agreement with the United States as soon as possible and not wait for the review planned for 2026. We must put an end to this uncertainty.”

This situation raises questions and concerns about what might lie ahead for the US long-term economic strategy, especially concerning destabilizing the trade relationship with a long-term partner like Canada and turning toward countries with less amicable political measures.

Response actions and all the future hurdles

These tariffs are a dangerous deal for Canadian jobs and industries, and they also threaten US businesses that will suffer the consequences of retaliation.

Canadian leaders have already indicated the possibility of retaliating with tariffs of their own for American products, leading to what might become a feedback loop of an escalating trade war.

A trade dispute like that could throw markets into chaos, raise prices, and make life more painful for consumers on either end.

Goods in the US that depend on steel and aluminium could become more expensive to the consumer, while Canadian producers may find it difficult to be competitive with the rest of the world.