Canada Looks To Diversify Trade Partnerships

Mark Carney has announced that Canada has implemented plans to restrict imports of foreign steel to help Canada’s manufacturers hit by tariffs imposed by the Trump administration.  Nearly 90% of all Canadian steel is exported to the U.S. Prime Minister Carney has pledged to diversify Canada’s trade partnerships away from the U.S.

“The trade actions of the United States are transforming global dynamics and supply chains," Carney noted.  "We’ve become too dependent on the United States as our biggest customer. We must diversify our trade relationships and, above all, we must rely more on Canadian steel for Canadian projects. We have the potential to become our own best customer during this time of change.”

Canada Says Move Is In Response To Trump

Canada's open-market policy has suffered from the dumping of cheap foreign steel products, largely from Chinese sources. But Carney’s announcement was primarily made in response to the 25%, then doubled to 50%, foreign tariffs imposed by President Trump.

Carney has also warned of the possibility that American tariffs might remain in place as an ongoing Trump policy, even with an updated USMCA trade pact in place.  The steel and aluminum sectors are not alone in taking a hit from U.S. tariff policies. Trump's imposition of a 50% tariff on all copper imports has substantially increased copper market prices since the announcement.

Trump said the metal import tariffs are for national security reasons. While steel is the number one metal needed by the U.S. Department of Defense, copper is the number two component.  But copper is classed as a critical mineral, and vitally important to every modern industrialized economy.  Last year, the U.S. imported more than 50% of its copper needs from Canada.

Canada: Trade War Will Hurt The U.S. More Than Anyone Else

Ian Lee at the Sprott School of Business at Carleton University in Ottawa said that while the U.S. can increase its steel production, copper production increases will be far more difficult, due to more limited U.S. availability and the complexities of developing copper mines.

Professor Lee says that with copper being such a vital component, Canada and other copper exporters will find other markets. But with a 50% tariff on foreign metals, Ian Lee says Trump’s tariff policies will only hurt American competitiveness, and this is certainly true for its copper needs.

“The demand for copper is only going to increase. There’s going to be a shortage. There’s no good substitute for copper in these critical industries," Lee said.  "Anything electronic today is absolutely essential, and there are very few substitutes. It’s inexplicable what Mr. Trump is doing. He’s going to hurt the United States much more than anybody else.”

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com