Canada recently dropped 25 per cent retaliatory tariffs on USD 21 billion of US products such as orange juice, peanut butter and motorcycles with an aim to reset trade ties. While welcomed in Washington, Canada has kept tariffs on US steel, aluminium and vehicles. The auto sector, in particular, remains strained. Autos assembled in Canada face a 25 per cent US tariff, while Canadian steel and aluminium are subject to a 50 per cent levy. Treasury Secretary Scott Bessent highlighted that Detroit automakers depend on Canadian aluminium, underlining its strategic importance.
The broader picture reveals a contradiction. Tariffs were intended to revive US production but appear to be damaging demand. An analysis shows how supply chain disruptions are hurting manufacturers across North America. Data confirms this. In Q1 2025, total aluminium demand fell 4.1 per cent year-on-year to 6.53 million tonnes, reversing the 4.3 per cent rebound seen in early 2024, according to the Aluminium Association.
