The U.S. auto industry's steady flow of aluminum — a critical ingredient in the shift to lighter and electrified vehicles — may hinge on whether the temporary tariff reprieve granted to Canada becomes permanent.
President Donald Trump last week imposed penalties of 10 per cent on imported aluminum and 25 per cent on imported steel, but with two notable exceptions — Canada and Mexico, which are wrangling with the U.S. over the future of the North American Free Trade Agreement.
It was a lucky break for the auto industry.
North America's automotive supply chain relies heavily on raw aluminum from smelters in Canada, where cheap, abundant hydropower has made it a favored location to produce the energy-hungry metal. And in reaction to Trump's tariffs, the industry gasped collectively, and then exhaled at the exemption — at least temporarily — of Canada.
Steel makers, including U.S. Steel and AK Steel, were supportive of the president's move. U.S. Steel responded to the promise of tariff protection by saying it will reopen its steel mill in Granite City, Ill., which has been closed for two years.