President Trump withdrew plans to raise tariffs on Canadian aluminium to 50% mere hours after announcing the hike.

On 12 March, the US government implemented 25% import tariffs on all aluminium and steel imports but withdrew plans to impose an additional 25% tariff on Canadian metal. This decision followed Ontario Premier Doug Ford’s proposed 25% surcharge on electricity exported to Michigan, Minnesota, and New York. This move was seen as retaliation to the trade measures imposed by the USA and intended to capitalise on Ontario’s role as a significant electricity provider to those states.

The back-and-forth between the USA and Canada further contributed to a volatile market already under pressure from President Trump’s initial tariff announcement. The tariffs could reshape existing trade patterns if Canadian exporters look to increase shipments to other regions, such as Europe. There is also the potential for exports of Russian aluminium to be redirected towards the USA after President Putin said the country could supply 2Mt of aluminium if trade with the USA reopened.

Despite trade uncertainties, Russia is unlikely to surpass Canada as the main aluminium trade partner of the USA. This is largely due to the high tariffs imposed on Russian aluminium, which stand at 200%, compared to those placed on Canadian aluminium.

While the US administration may consider these tariffs a tactic to strengthen the domestic aluminium industry, US producers lack the capacity to substantially increase production and reduce the country’s import reliance. US production capacity was ~1.5Mt in 2024, and output reached just over 650kt. In the immediate term, the tariffs will likely lead to higher costs for US aluminium consumers. Notably, the largest markets for aluminium in the USA are transportation, packaging, and construction.