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Tariff tensions in focus: US–Canada aluminium ties ahead of August 1

EDITED BY : 3MINS READ

As August 1 approaches, trade discussions between the US and Canada have shifted focus amid ongoing concerns over aluminium tariffs. US Treasury Secretary Scott Bessent, speaking on July 31, 2025, acknowledged the financial strain faced by American manufacturers, particularly Ford Motor Company and signalled potential tariff relief for Canada's aluminium and steel industries.

Tariff tensions in focus: US–Canada aluminium ties ahead of August 1

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In June, Trump announced a tariff hike on global aluminium and steel imports, doubling the rate to 50 per cent. The move was justified on national security grounds, citing insufficient domestic production of the critical metals.

The US and Canada are engaged in negotiations to resolve the ongoing aluminium and steel tariff dispute ahead of the approaching Friday deadline. On Wednesday, Prime Minister Mark Carney stated that a resolution may not be guaranteed, while President Trump confirmed a 90-day extension for parallel trade discussions with Mexico.

Ford Motor reported earlier this week that tariffs resulted in a USD 800 million payment by the company during the second-quarter, with a substantial portion attributed to duties on Canadian aluminium and steel. Notably, the body of Ford's top-selling F-150 pickup truck is built using military-grade Canadian aluminium produced in Quebec.

On Thursday evening this week, Trump signed an executive order increasing tariffs on Canadian goods traded outside the United States-Mexico-Canada Agreement (USMCA) from 25 per cent to 35 per cent. However, existing tariffs on metals remained unchanged. 

Prime Minister Mark Carney had aimed for an August 1 deadline to secure a broader trade agreement with the US, but acknowledged that a tariff-free deal was unlikely and suggested the timeline for finalising an agreement may be extended.

The US aluminium producer Alcoa Corp., which operates three smelters in Quebec, reported USD 115 million in tariff-related costs for the second quarter. Since the onset of the trade dispute, CEO Bill Oplinger has maintained that President Trump's vision of expanding the US smelting capacity is impractical, emphasising the deep integration between the Canadian and the US aluminium industries. 

Canadian steel producer Algoma Steel Group Inc. is pursuing approximately USD 500 million in financial support from the federal government to strengthen its position following over four months of the US tariffs. This week, the company also suspended its dividend to conserve cash.

As trade tensions escalate, the ongoing aluminium tariff dispute underscores the deep economic interdependence between the US and Canadian metals industries. While negotiations continue, uncertainty looms over whether a resolution can be reached, especially amid rising financial strain on key manufacturers and producers on both sides of the border.

Also read: Tariff-for-tariff? Ford pressures Ottawa as US deadline nears

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EDITED BY : 3MINS READ

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