U.S. President Donald Trump’s tariffs targeting Canadian steel and aluminum are set to start Wednesday, and from cars to appliances to beer, industry experts warn that consumers will likely bear the brunt of the impact by paying higher prices.
“It’s going to impact everyday consumer behaviour,” said Jean Simard, CEO of the Aluminum Association of Canada. “They don’t make sense at all.”
Last Friday, Trump reaffirmed that a 25 per cent tariff on all steel and aluminum imports would go into effect on Wednesday, even as he issued temporary reprieves for penalties on most Canadian goods covered under the CUSMA trade agreement and those aimed at the auto industry until April 2.
The president first announced the steel and aluminum tariffs, which also apply to items containing aluminum, back in February while en route to the Super Bowl.
While most of the president’s trade policies have rested on unfounded claims of fentanyl flooding into the States from Canada or accusations of unfair trade practices, Lana Payne, the national president of Unifor, Canada’s largest private sector union, said the reasons behind the tariffs on steel and aluminum are less clear. This makes it harder to know what will convince Trump to lift the penalties — or if they will even go into effect at all.
“We’re preparing for the worst and hoping for the best,” Payne said.
This is not the first time Canada has faced the threat of Trump’s tariffs on steel and aluminum. In 2018, during Trump’s first term, the president slapped 25 per cent tariffs on steel imports and a 10 per cent tariff on aluminum.
While those penalties lasted for around 14 months without substantial job loss, Ron Wells, president of United Steelworkers Local 1005 that represents workers at the Stelco plant in Hamilton, said the upcoming tariffs could pose a greater challenge when applied on top of Trump’s other tariffs.
“In 2018, it was easier for the steel companies to manage the situation because other industries were still buying and producing and consuming steel products, even though they had to change who they were selling it to,” Wells said.
“But this time, with tariffs put on by the American government then responsive tariffs by the Canadian government, it’s going to slow the economy and probably create recessions in both countries that will definitely have an impact on the steel markets.”
Unifor’s Payne, whose union represents aluminum workers and those in the automaking industry who rely on steel, echoed Wells’ concerns, adding that businesses are “scrambling” to figure out how they’ll be affected.
“If their costs continue to go up, that has an impact on the people that they employ,” she said. “This is the nature of business.”
A Ford F-150, Simard explained, could see a price increase of $3,000 due to the tariffs. Meanwhile, electric vehicles, which Simard noted are growing more reliant on aluminum, might also get more expensive.
By April 2, should the tariffs on steel and aluminum remain in place, these materials could face up to a 50 per cent penalty when entering the States once Trump’s across-the-board tariffs kick in. The auto industry also faces an additional 25 per cent tariff, on top of the other penalties.
Economists warn that these compounding tariffs, along with Ottawa’s retaliatory measures, could shed an estimated 70,000 jobs in Ontario and lead to zero economic growth in 2025.
There is a lot of uncertainty surrounding any Trump tariff announcement, given his penchant for backpedalling once penalties go into effect. Over the weekend, Trump’s top trade official walked back the president’s immediate threats of a 250 per cent tariff on Canadian dairy and lumber to April.
Wells gave it a 50-50 chance that Wednesday’s tariffs would go into effect, while Simard said he expects the president to quickly halt them.
“Very high tariffs have very high impacts in the short term, which might force a solution earlier,” Simard said.
The confusion caused by the on-again, off-again tariff threats caused stock markets on both sides of the border to take a steep tumble Monday.
