Canada Readies Financial Lifeline for Aluminum Producers as US Tariffs Loom in 2025

Ottawa draws battle lines—steel yourselves for a subsidy showdown.

The Tariff Tango

Canada’s aluminum sector braces for impact as US trade barriers threaten to dent exports. No hard numbers yet, but the message is clear: if Washington plays hardball, Ottawa will open its wallet.

Economic Jiu-Jitsu

Expect creative state aid—grants, tax breaks, maybe even cheap loans—because nothing says 'free market' like government cash propping up private industry. Classic move for a sector that’s 90% export-dependent.

The Cynic’s Corner

Because when has throwing public money at corporate problems ever backfired? *cough* Bombardier *cough* SNC-Lavalin.

Canada seeks to offer support to its giant aluminum firms amid Trump’s tariff policies 

About 50% of the aluminum used in the US comes from other countries, and most comes from Canada. Last year, Canada exported 3.2 million tons of the metal to America.

US President Donald TRUMP increased steel and aluminum import tariffs to 50% last month. This was to ratchet pressure on global steel producers and escalate his trade war to further his objective of boosting the local production of essential materials for building.

Concerning Canada’s big MOVE to offer support to its big aluminum firms, Simard said that this is part of a larger discussion where everything is on the table. He further stated that no decision had been reached. 

According to Simard, with the 50% tariff in effect since June 4, it is normal that there are discussions, among other things, about the impact on businesses’ liquidity if the situation persists over time.

Simard’s remarks come after earlier media reports, which cited Mélanie Joly, the Minister of Innovation, Science and Industry of Canada, said the government is in talks with Rio Tinto to provide financial assistance in light of Trump’s devastating tariffs policies.

According to reports from sources, Joly reportedly raised the discussions in a meeting with business leaders in the Saguenay region of Quebec, a major center of aluminum production, often called Canada’s Aluminum Valley.

Rio Tinto declined a request for comment. On the other hand, a Joly office spokesperson stated that Ottawa is currently having “active conversations” about the best ways to support Canada’s aluminum industry, given an environment of unjustified US tariffs, to support greater investment in the sector.

Trump’s tariff policies on steel and aluminum cause undesirable outcomes 

Trump plans to back and promote investment in steel and aluminum production within the country. These two are key products in the construction sector. 

Apart from this, aluminum has an additional benefit. It is widely employed in the transport sector and the packaging industry.

Still, aluminum end-users in the physical market have confronted certain problems in America. For instance, they should expect to pay at the London Metal Exchange when purchasing the raw material. Also, there is another cost for the spot market price. This is inclusive of shipping and duties.

US manufacturing sector sales have dropped since they depend on raw-material imports. May data from the Institute for Supply Management (ISM) indicated the sector contracted for the third month, recording a six-month low. This decrease led to the sustained loss of jobs throughout the industry. It has also been hurt by increasing energy prices.

It is worth pointing out that apart from exporting aluminum to the US, Canada also imports steel. A quarter of US steel comes from imports, mostly from Mexico and Canada. Analysis from sources backed up that claim.

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