Port of Oswego’s FTZ offers temporary lifeline as US tariffs squeeze Canadian aluminium trade

The 50 per cent tariffs imposed by the US on Canadian aluminium since June 4, 2025, have sharply increased costs for Canadian producers, who supply about half of the aluminium used in the US.

The higher duties have driven price inflation across supply chains, caused supply disruptions, and put roughly 8,700 direct Canadian aluminium production jobs at risk.

At the Port of Oswego, importers are using its Foreign Trade Zone (FTZ) designation to partially offset the blow. Granted in 2023, the FTZ status allows companies to delay or reduce tariff payments under certain conditions, offering temporary relief amid volatile trade conditions.

Port Authority Interim Director Tom Schneider said companies stockpiled material ahead of the tariffs, first after election day and again when the Trump Administration levied a 25 per cent tariff earlier this spring, before the full 50 per cent rate took effect.

Also read: Tariff tensions rise as Canada-US trade deal remains uncertain

Schneider explained, “Just having that period of non-certainty has led those who are buying and storing and then reselling aluminium that is imported to be looking for solutions within the structures that allow it to sit foreign until a certain point in time in the future where the rate may be lower.”

However, he was doubtful the relief would be long-lasting, noting that a key challenge now is securing adequate storage for imported metal. He said brokers are exploring options such as unloading directly onto bonded trucks for delivery to bonded warehouses, but suitable facilities remain unavailable.

The shortage of storage capacity, combined with the tariff pressure, has led to fewer aluminium orders, resulting in a 30 per cent drop in port revenue. To mitigate the decline, the port has diversified delivery routes, shipping aluminium by rail to Novelis’ casting plant in Kentucky instead of delivering raw metal to its nearby facility.

“We're fortunate to have that business,” Schneider noted. “And I think that business was a long time in developing to create a domestic source.”

Despite the slowdown in aluminium shipments, the Port of Oswego continues to serve a wide range of international clients and remains New York’s only grain export hub on Lake Ontario. Its operations generate over USD 500 million in economic impact and support more than 2,200 jobs.

For more details on aluminium industry future read: Global Aluminium Industry Outlook 2025

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