Alberta’s billion-dollar steel and aluminum industries are bracing for a big hit on Wednesday as U.S. President Donald Trump is promising to impose a 25 per cent tariff on Canadian metal products entering the United States.
It’s a prospect that has local manufacturers as worried as ever following a day that once again saw the White House threaten even bigger tariffs before backtracking.
Early Tuesday, Trump said he would double — to 50 per cent — his planned tariffs on Canadian steel and aluminum starting Wednesday in response to Ontario’s new surcharge on exports of electricity to some U.S. states.
But after speaking with U.S. Commerce Secretary Howard Lutnick, Trump’s tariff czar, Ontario Premier Doug Ford agreed to pause the tax until he has trade discussions with the administration in Washington on Thursday. That prompted the White House to reduce its metal tariff threat back to 25 per cent.
Among Albertans working in the metals industry, the uncertainty is wearing thin.
Glen Brooks, president of Allied Metal Ltd. — a 55-year-old Canadian manufacturing company in northeast Calgary that caters to all industries — has been losing sleep over on-again, off-again tariffs.
“We have no idea where it’s going to go,” said Brooks, early Tuesday afternoon.
“The biggest thing for us is just the market instability this is causing. We’re already starting to see effects of that — projects are getting put on hold, and you can just see the amount of quoting and activity in the industry, it’s just starting to drop already.”
Trump announced in early February he would impose 25 per cent tariffs on all aluminum and steel imports to the U.S., including those from Canada, on March 12.
On Tuesday, the White House said Trump will go ahead with a 25 per cent tariff on Canadian steel and aluminum just after midnight, capping off yet another chaotic day of trade threats.
Allied Metal made roughly $8 million in revenue last year, and according to Brooks, about 30 per cent of that was thanks to business south of the border.
Brooks said that when tariffs were first talked about, the company actually saw a quick spike in business.
“We actually saw people stocking up on parts to get them in under the tariffs,” he said.
Now, with the tariff threat inching closer to becoming a reality — and the talks of it being doubled to 50 per cent — Brooks isn’t sure how it will play out for Allied Metal and its 45 employees.
So far, he said, the company has not had to reduce staff.
“When you have a payroll like mine, it only takes a couple bad months for those reserves to be eaten up. And then you’ve got to make hard decisions,” Brooks said.
He hopes cooler heads will prevail, bringing a quick end to the trade war — and he’s not alone in this hope.
“It’s hard to prepare because one day the tariffs are on, the next day they’re off. We’re having to switch gears repeatedly because we’re not sure if we’re coming or going,” said Chad Spicer, president and owner of Calgary-based All Metal Manufacturing.
“If it was once every four years, you get a new administration in, it’s OK. But we’re getting daily changes and it makes it really hard to shift gears repeatedly.”
‘Nobody wants to pay more for the same thing’
In January, Alberta exported over $105 million worth of metal and non-metallic mineral products to the United States, its most significant trading partner, according to provincial government data.
Spicer said about 80 to 90 per cent of his business involves an end user in the United States.
For dealings north of the border, he said the supply chain is still integrated with the U.S., meaning even Canadian customers could be hurt by U.S.-imposed tariffs.
“Because we work so much with our U.S. customers, if we lose them, we don’t really have much business left, which makes it tough,” said Spicer on Tuesday.
“I know we’d all like to just sell to Canadian companies, but we have 15 employees here that we don’t want to lay off. If we don’t have work, we can’t pay them.”
Though Donald Trump has mused about hitting this sector with a 50 per cent tariff, Spicer says even 25 per cent is enough to drastically harm businesses like his.
“Even if they do go through, things are going to go up immediately … but wages aren’t,” he said, noting many Albertans are already feeling the pinch of a rising cost of living.
“Nobody wants to pay more for the same thing.”
