The trade war is about to become more intense as the Trump administration eyes imposing a fresh wave of sweeping tariffs on steel, aluminum, and copper imports.
This decision also follows an earlier campaign promise to impose broad tariffs on key imports, including a 25% tariff on Canadian and Mexican imports and a 60% tax on Chinese goods. This doubling down on protectionist trade policies is in line with President Donald Trump’s “America First” agenda, arguing that these tariffs will revitalize U.S. manufacturing and reduce reliance on foreign materials.
However, as it is, the US remains highly dependent on trade to build its metals industry. For instance, Canada is among the top suppliers of refined copper to the US, accounting for 128,000 metric tons in 2023. Canada is also a top source of copper for thr US, representing 37% of its imports of copper content, matte, ash, and precipitates, and 48% of its imports of ore and concentrates from 2019-2022.
For steel, Canada remains the largest source of US imports, accounting for 21% of total imports from 2019-2022, followed by Mexico at 15%.
Canada is also US’ top import source of aluminum, importing 2.85 million metric tons from January to October 2024. From 2019 to 2022, Canada accounted for 52% of total aluminum imports by the US.
Should Trump pursue the tariffs on metals, local metal producers in the US could see a boost as foreign competitors face higher costs. Manufacturing jobs in domestic steel and aluminum plants may also temporarily increase.
However, a potential trade-off could be layoffs and price hikes as automotive and construction industries bear the brunt of increased material costs. This is then expected to trickle down to consumers who will face higher prices on everything from cars to household appliances, with projected price increases of 5-10%.
Facing the threat of US tariffs, Canada and Mexico have responded with firm opposition, preparing countermeasures that could escalate into a full-blown trade war. Ottawa has outlined a three-stage counterattack, targeting iconic American goods such as Florida orange juice, Kentucky bourbon, and energy products. If fully implemented, Canada’s countermeasures could affect over $147 billion in U.S. exports.
Mexico is considering filing a trade dispute under the USMCA, citing violations of the agreement. Additionally, it is also eyeing imposing tariffs on US agricultural products, which are estimated to be worth $37 billion, potentially hurting American farmers already struggling with inflation and supply chain disruptions.
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