The US-Canada Trade War

The US has implemented tariffs on USD 20 Bn of Canadian goods, including a 50 per cent duty on steel and aluminium, effective from 8 September. This has significantly impacted Canadian exports, with 37 per cent of steel and 80 per cent of aluminium still directed to the US. As Canadian producers face thinner margins and higher costs, the US market grapples with increased input expenses while supply chains are rerouted instead of reshoring. The potential for rebuilding domestic US supply appears limited in the near term due to the lengthy process for establishing new smelting capacity. Geopolitical tensions and trade dynamics suggest ongoing volatility in North American commodities markets, directly affecting the steel and automotive sectors heavily intertwined with these tariff changes.