Canada’s Aluminum Exports Plunge 50% Amid Trump Tariffs — Industry at Risk

Introduction: A Sudden Shock to a Vital Trade Flow

Canada’s aluminum industry, long a reliable supplier to the United States and a pillar of the country’s manufacturing export base, is now confronting one of its most significant challenges in decades. In the wake of sharply increased tariffs imposed by the U.S. administration earlier this year, the value of aluminum exports from Canada to its southern neighbor has plunged to levels not seen in three years.

Industry data, combined with analysis from trade economists and first-hand accounts from producers, paints a picture of a sector caught in a cross-border economic storm — one that is forcing both immediate operational shifts and long-term strategic recalculations.

The Numbers Behind the Decline

Statistics Canada’s June trade report revealed a dramatic collapse in export values:

• Down about one-third compared to the 36-month average for the sector.

• Down 50% compared to March 2025 — a staggering fall in just three months.

In dollar terms, that drop represents approximately C$400 million less than the average over the past three years and nearly C$800 million less than March’s peak.

Table 1: Export Value Trends (Canada → U.S.)

Source: Statistics Canada, UBC Analysis

What Triggered the Crisis: A Timeline of Tariffs

The immediate cause of the downturn can be traced to the tariff policy shift under the second Trump administration:

• Mid-March 2025: A 25% tariff on Canadian primary aluminum exports to the U.S. is announced and swiftly implemented.

• June 4, 2025: The tariff is doubled to 50%, effective immediately.

For many U.S. buyers, this made Canadian aluminum uncompetitive almost overnight.

Regional Impact: From Kitimat to Quebec

British Columbia

• Kitimat, home to a major Rio Tinto smelter, saw export values to the U.S. hit a two-year low in June.

• No immediate layoffs, but uncertainty remains.

Quebec

• Produces 90% of Canada’s aluminum, mostly powered by hydroelectricity.

• Despite being “green aluminum,” Quebec’s exports to the U.S. are slowing sharply.

Table 2: Regional Export Impact

Industry Response: Rerouting the Flow

• Diversion to Europe: Over 100,000 metric tons redirected from the U.S. to European buyers.

• Exploring Asia: Competition is fierce, freight costs higher.

• Absorbing Costs: Temporary measure, unsustainable long-term.

Market Reactions in the U.S.

• Rising Aluminum Premiums due to reduced supply.

• Shift to Scrap to bypass tariffs.

• Pressure on Downstream Producers relying on Canadian imports.

Global Context: Competitive Pressures

• China: Largest producer, domestic demand limits exports.

• Middle East: Expanding exports aggressively.

• EU: Interested in low-carbon aluminum but with volume limits.

Expert Opinions: Short-Term Pain, Long-Term Uncertainty

“It’s a litmus test for how Canada navigates strategic trade relationships in an era where political volatility can change the rules overnight.” – Prof. Werner Antweiler

Possible Paths Forward

1. Diplomatic Engagement

2. WTO or USMCA Challenges

3. Domestic Value-Addition Strategies

Human Side of the Story

Communities in Kitimat and Quebec feel the uncertainty. While jobs are intact for now, extended tariffs could change that.

Conclusion

The North American aluminum market is under strain. Whether it can be rebuilt or whether Canada will pivot permanently to other buyers is yet to be seen.

FAQs: Canada–U.S. Aluminum Trade Dispute

1. Why did the U.S. increase tariffs on Canadian aluminum?
To protect domestic producers, citing overcapacity and unfair competition.

2. How much did exports fall after the tariffs?
Around 50% in value between March and June 2025.

3. Which Canadian provinces are most affected?
Quebec (90% of production) and British Columbia (8%) are hit hardest.

4. Can Canada challenge these tariffs legally?
Yes, through WTO or USMCA, but both are slow and politically sensitive.

5. Are there alternative markets for Canadian aluminum?
Yes, mainly Europe and Asia, though they pose pricing and logistics challenges.

6. How are U.S. manufacturers responding?
They’re using more aluminum scrap and seeking alternative suppliers.

7. Could this dispute impact jobs in Canada?
If prolonged, yes — especially in smelter towns dependent on U.S. sales.