{"id":48927,"date":"2025-08-06T07:08:08","date_gmt":"2025-08-06T07:08:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/48927\/"},"modified":"2025-08-06T07:08:08","modified_gmt":"2025-08-06T07:08:08","slug":"canadian-aluminum-steel-products-dealt-biggest-blow-from-u-s-duties-in-june-data-show","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/48927\/","title":{"rendered":"Canadian aluminum, steel products dealt biggest blow from U.S. duties in June, data show"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Total exports of unwrought aluminum fell in June after Donald Trump doubled the tariff on the metal to 50 per cent that month.Evan Buhler\/Reuters<\/p>\n

Aluminum and steel products incurred nearly two-thirds of all U.S. duties on imports from Canada in June, reflecting the concentrated pain being inflicted on a handful of industries by President Donald Trump\u2019s tariff<\/a> onslaught.<\/p>\n

But while economists warn Canada\u2019s weak exports are expected to sharply slow growth in the second quarter, the latest trade numbers reinforce how the United States-Mexico-Canada Agreement continues to shield this country <\/a>from the worst of Mr. Trump\u2019s trade wars.<\/p>\n

Canada\u2019s merchandise trade deficit with the world widened to $5.9-billion in June, which was up from $5.5-billion in May and the second-highest deficit on record after reaching $7.6-billion in April, according to new numbers released Tuesday by Statistics Canada.<\/p>\n

While exports from Canada to the U.S. actually increased in June by 3.1 per cent from the month before, owing largely to higher prices for oil, exports plunged 12.5 per cent from the same month in 2024.<\/p>\n

Tony Keller: Why the damage to Canada from Trump\u2019s tariffs has been small (so far)<\/a><\/p>\n

The deepest wounds were felt by a select group of industries hit hard by Mr. Trump\u2019s<\/a> sectoral tariffs, which he imposed on autos, steel and aluminum under Section 232 of the U.S. Trade Expansion Act of 1962.<\/p>\n

Total exports of unwrought aluminum and iron and steel products both fell in June by more than 11 per cent, after Mr. Trump doubled the tariff on steel and aluminum<\/a> to 50 per cent that month.<\/p>\n

Meanwhile, motor vehicles and parts exports fell 4.2 per cent in June.<\/p>\n

In fact, new U.S. trade numbers show a relatively small number of Canadian products accounted for most of the duties the U.S. collected in June.<\/p>\n

Aluminum and steel products alone were responsible for just under 60 per cent of the US$710-million in calculated duties collected by Washington, according to a Globe and Mail analysis of U.S. Census Bureau numbers released Tuesday.<\/p>\n<\/p>\n

\u201cThere\u2019s a small share of trade that\u2019s being impacted by tariff hikes and for those sectors it\u2019s significant, but the large majority of goods are crossing the border duty free,\u201d said Nathan Janzen, assistant chief economist with Royal Bank of Canada, in an interview.<\/p>\n

Canada is in a relatively enviable position owing to the protection afforded it by the USMCA.<\/p>\n

Goods imported under USMCA are exempt from Mr. Trump\u2019s so-called fentanyl tariffs, which he increased last week to 35 per cent<\/a> after Canada and the U.S. failed to reach a trade deal by his Aug. 1 deadline.<\/p>\n

While U.S. trade data showed the share of imports that came in from Canada under USMCA stood at 55.7 per cent in June \u2013 down slightly from May but up from 34 per cent in January \u2013 the U.S. Census Bureau also reported that 92 per cent of imports from Canada entered the country duty-free, with other trade provisions making up the difference.<\/p>\n

The USMCA exemptions don\u2019t apply to the President\u2019s sectoral tariffs on aluminum, steel and autos, though a carve-out exists for the value of U.S. auto parts in Canadian-made vehicles. <\/p>\n

Analysis: Harsh, informal, wide-ranging: How Trump\u2019s trade talks have changed<\/a><\/p>\n

Economists also warn Canada\u2019s low tariff rate is being skewed by shifting trade flows. As U.S. importers cut back on Canadian goods that carry higher duties, that has the effect of lowering Canada\u2019s overall tariff rate.<\/p>\n

Still, the Bank of Canada last month estimated Canada\u2019s effective tariff rate at 5 per cent. Mr. Janzen notes the latest U.S. Census Bureau numbers put Canada\u2019s tariff rate at 2.4 per cent \u2013 one of the lowest among America\u2019s major trading partners. <\/p>\n

The USMCA protection, alongside evidence that the U.S. tariffs are hitting the job market, has shifted the narrative on the Canadian and U.S. economies from earlier this year.<\/p>\n

\u201cWhereas before we were worried about having significant economic pain imposed on Canada by the United States, really what we\u2019re worried about now is that the U.S. could impose significant pain on its own economy, and that has negative implications for Canada,\u201d he said. <\/p>\n

Mr. Trump\u2019s sector-specific duties are hammering U.S. manufacturers that import many of their parts and raw materials from Canada.<\/p>\n

Last week, Ford Motor Co. said it paid US$800-million in tariff costs in the second quarter. It relies heavily on imported aluminum from Quebec to produce the body of its F-150 pickup truck, one of the bestselling vehicles in the U.S.<\/p>\n

After Ford\u2019s announcement, U.S. Treasury Secretary Scott Bessent indicated the U.S. was willing to negotiate<\/a> with Canada on metal tariffs. <\/p>\n

That was a welcome development for Canada\u2019s aluminum sector. <\/p>\n

\u201cAluminum markets were able to absorb tariffs at 25 per cent, but not at 50 per cent,\u201d said Jean Simard, chief executive officer of the Aluminum Association of Canada.<\/p>\n

Because of the steep costs and long timelines associated with stopping and restarting smelters, companies are \u201cnot laying people off, we\u2019re not curtailing\u201d Mr. Simard said. But with cash flow being impacted, \u201cwe\u2019ve had to set aside what we would normally be undertaking in the coming weeks and months to maintain assets.\u201d <\/p>\n

And that could have long-term repercussions on the industry\u2019s ability to compete, Mr. Simard said, reiterating a message he delivered in Ottawa last week that the industry needs financial support for those types of necessary annual expenses. <\/p>\n

Tony Keller: What does Donald Trump want from Canada? We are about to find out<\/a><\/p>\n

Meanwhile, as Mr. Trump\u2019s tariffs curtail imports, the U.S. reported a sharp drop in its global trade deficit to a nearly two-year low<\/a> in June, with a collapse in goods imports from China leading the way, according to the U.S. Census Bureau. <\/p>\n

At the same time, the U.S. trade deficit with Canada shrank to US$1.3-billion, the smallest it\u2019s been since October, 2020. Whether that will temper Mr. Trump\u2019s tariff attacks is far from certain. <\/p>\n

Uncertainty from the trade war hangs over the outlook for Canada\u2019s economy, with Mr. Janzen noting in a report Tuesday that export volumes in the second quarter \u201cplunged a whopping 31.4 per cent at an annualized rate.\u201d <\/p>\n

With a much smaller decline in imports, that leaves trade \u201con track to subtract substantially\u201d from gross domestic product.<\/p>\n

Shelly Kaushik, senior economist at Bank of Montreal, also said trade uncertainty is expected to \u201cweigh heavily on growth.\u201d<\/p>\n

She wrote in a note that, \u201cwhile trade flows have recovered a touch from the spring, normalization is unlikely until the Canada-U.S. relationship stabilizes.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Total exports of unwrought aluminum fell in June after Donald Trump doubled the…\n","protected":false},"author":2,"featured_media":48928,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[901,888,902,879,877,903,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,43,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,41,39,42,40,900,892,886,883,913],"class_list":["post-48927","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-headlines","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/48927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=48927"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/48927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/48928"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=48927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=48927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=48927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}