Industry group says Trump tariffs could destroy U.S. demand for aluminum

An aerial view of Alubar, an aluminum rod manufacturer in Bécancour, Que., on March 5, 2025. THE CANADIAN PRESS/Christinne Muschi

Canadian mayors, workers and industry representatives are warning that the Trump administration's punishing tariffs on steel and aluminum could cost jobs and cause lasting damage to industries on both sides of the border.

They say Canada is already feeling the effects of the tariffs, and they're hopeful for a change of heart from the White House once Americans also start feeling the sting.

In Hamilton, Ont., a hub of Canada's steel industry, Mayor Andrea Horwath said Wednesday that the city has never encountered a challenge "as dire as what we are facing now."

All countries, including Canada, were hit Wednesday with 25 per cent tariffs on steel and aluminum imports into the United States — part of U.S. President Donald Trump's attempts to realign global trade. About a quarter of all steel used in the United States is imported, and Canada is the country's largest source of both steel and aluminum. About 90 per cent of Canadian aluminum output is shipped south of the border.

Horwath said the economic hit of a protracted trade war would be felt across the city of around 600,000 people, not just by the 28,000 people with direct and indirect jobs in the steel industry.

"I am very concerned, and I am hoping that we can get some resolution to this chaos," she said in an interview. "The longer (the tariffs) last, the more permanent damage happens to our industry here."

In Sault Ste. Marie, Ont., Algoma Steel Inc. confirmed it has "temporarily paused shipments to the U.S." pending the outcome of discussions between Canadian and American officials on Thursday. A spokesperson said the company is "deeply concerned" by the tariffs.

Mayor Matthew Shoemaker said long-lasting U.S. tariffs would have a devastating impact on the northern Ontario city, which is heavily dependent on the steel producer.

"That's not just the steelmakers and the contractors that go in there, but it's also the restaurants and the grocery stores that sell retail goods to steelworkers," he said in an interview.

François Desmarais, vice-president of trade and industry affairs at the Canadian Steel Producers Association, said the trade war has already cost some steelworkers their jobs.

“Some of our members have already announced layoffs publicly in the last few days. We expect more personnel cuts in the coming weeks,” he said.

Jean Simard, president of the Aluminum Association of Canada, said orders from U.S. clients will slow and aluminum will pile up at Canadian factories if the tariffs persist.

He pointed to the example of Coca-Cola, which last month said it would shift to using more plastic bottles instead of cans if Trump’s tariffs took effect.

"A 25 per cent tariff is destructive to a market," he said. "So there will be a destruction of demand for aluminum in the American market. We're already starting to see it."

If the tariffs last, he said, Canadian producers will gradually look to sell more of their aluminum to Europe. But he added that some customers, including auto manufacturers, are locked into contracts and will have no choice but to pay the steep tariffs on imported aluminum.

Last month, the chief executive officer of Ford Motor Co. warned that 25 per cent tariffs would be devastating to the U.S. auto industry.

On Wednesday, the Canadian government announced it would impose 25 per cent tariffs on nearly $30 billion worth of U.S. goods in retaliation against the steel and aluminum tariffs.

Simard said there’s a good chance the White House will soon face pressure to relax the tariffs as the market reacts. "It's not sustainable. It doesn't make sense," he said, urging Canada not to back down. "We must draw our line in the sand and remain firm."

In Kitimat, B.C., where Rio Tinto operates its BC Works aluminum smelter and hydropower facility, the shadow of uncertainty is looming over the community of about 8,000 residents, Mayor Phil Germuth said.

“The only reason Kitimat was built in the first place was for the aluminum industry,” he said. “They have been the largest and the most consistent employer in this region."

Meanwhile, Saskatchewan Premier Scott Moe told reporters his province is working on a plan that would help keep steelworkers employed, though he offered no details.

Evraz North America operates Western Canada’s largest steel plant in Regina. Mike Day, president of the United Steelworkers Local 5890, said workers at the plant are feeling anxious amid the economic uncertainty.

"My message to Donald Trump is to stop. You have to stop. You’re hurting both the Canadian and American economies, as well as workers in both countries," Day told reporters at a news conference in Regina. "This is an economic attack on workers."

Day said he believes the Regina mill can maintain production despite the tariff.

“(But) there’s the uncertainty of what (Trump) is going to do in the next three hours, tomorrow or next week."

This report by The Canadian Press was first published March 12, 2025.

— With files from Stéphane Blais and Joe Bongiorno in Montreal, Maan Alhmidi in Toronto, Sharif Hassan in Hamilton, Ont., Jeremy Sines in Regina and Chuck Chiang in Vancouver.

Maura Forrest, The Canadian Press