Tariff Fallout: One Month In, Trump’s Metal Duties Start to Hit Home

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It’s been just over a month since President Donald Trump slapped a 25% tariff on Canadian steel and aluminum—and the ripple effects are already spreading across North America’s economy.

Canada, which exported nearly $35 billion worth of these metals to the U.S. last year, is starting to feel the squeeze. While early projections tried to downplay the impact, it’s becoming increasingly clear that these tariffs aren’t just political posturing—they’re fundamentally reshaping key industries and supply chains.

Sticker Shock in the Auto Sector

One of the most visible impacts of the tariffs is in vehicle manufacturing. According to Jean Simard, CEO of the Aluminum Association of Canada, just the aluminum tariffs alone tack on about $3,000 to the cost of a single Ford F-150. When steel and potential auto tariffs are added to the mix, that number rises to $12,000—per truck.

“That’s destructive,” Simard warned, pointing to the knock-on effect this could have on consumer demand and industry stability.

While aluminum producers have passed along some of their added costs to buyers, sectors like automotive and construction—two of the largest consumers—are bracing for reduced demand as prices soar.

Layoffs, Cutbacks, and Delayed Investment

Steel producers are being hit even harder. Catherine Cobden, president of the Canadian Steel Producers Association, says companies are already feeling the crunch, facing an environment where costs can't be passed on as easily.

“We’re starting to see layoffs, investment deferrals, and production slowdowns,” Cobden said.

Unlike aluminum, steel is much more difficult to redirect to other markets, making diversification a limited option. Add a global oversupply of steel, and the pressure mounts.

“There is a significant amount of chaotic activity as people are pivoting around supply chains,” Cobden added. “The market signals are not great.”

The association is urging the federal government to implement new border protections to defend Canadian producers against cheap imports and stabilize the industry amid the uncertainty.

Corporate Toll: Alcoa and Algoma Feel the Heat

Alcoa Corporation—one of Canada’s biggest aluminum producers—reported a $20 million loss last quarter directly tied to tariffs. Looking ahead, the company warned of an additional $90 million in costs for the current quarter. While some of that can be offset by charging higher prices, executives admit it won’t be enough to fully absorb the hit.

Meanwhile, steelmaker Algoma Steel Group Inc. faces its own crisis. Analyst Ian Gillies of Stifel slashed his price target for the company from $21 to $15.25, citing potential liquidity risks if the tariffs drag on for several years.

“If and when geopolitical risks subside, we will be quick to reverse course,” Gillies noted—but for now, the outlook is bearish.

Long-Term Reality or Short-Term Shock?

Although Trump paused reciprocal tariffs globally for 90 days after his April 2 announcement, metal tariffs seem likely to stay. Analysts don’t see a quick resolution. BMO’s Andrew Pappas, who heads asset-based metals lending, said the duties are likely to expedite renegotiations of the USMCA, but aren’t going anywhere soon.

The White House argues the tariffs are meant to encourage domestic production, but even industry leaders are skeptical of the timeline and feasibility.

“It takes years to build a new smelter, and we’d need five to six just to meet U.S. aluminum demand,” said Alcoa CEO William Oplinger. “You’d also need enough electricity to power seven nuclear reactors.”

Until that infrastructure exists, Oplinger noted, Canadian aluminum remains the most efficient and reliable supply chain.

The Road Ahead

With layoffs mounting and investment on hold, the full cost of the tariffs is only beginning to emerge. Unless major policy shifts are made—or unless the tariffs are dialed back—businesses on both sides of the border face a turbulent road ahead.

For now, manufacturers are tightening their belts, watching Washington, and hoping for clarity. But as the second quarter gets underway, it’s clear: the tariffs are not just a headline—they’re a hard reality.

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