Steel & Aluminum Production

• Primary aluminum ingots
• Flat-rolled steel
• Steel pipe and tube
• Aluminum extrusions
• Specialty alloys

1. 1

   Leverage low-carbon production credentials for green premium pricing

2. 2

   Pursue anti-circumvention measures against transshipped Chinese steel

3. 3

   Develop value-added downstream processing to capture more domestic value

4. 4

   Build strategic inventory buffers to weather tariff reimposition cycles

5. 5

   Negotiate bilateral steel/aluminum-specific trade framework outside CUSMA

Steel and aluminum were subject to Section 232 tariffs (25% steel, 10% aluminum) from 2018-2019 and faced reimposition threats in 2025. CUSMA provides no specific exemption from national security tariffs, leaving the sector perpetually vulnerable. The 2024-2025 tariff cycle demonstrated that bilateral trade agreements offer limited protection against unilateral US action.

Quebec's hydroelectric-powered aluminum smelters supply approximately 60% of US aluminum imports, making bilateral trade disruption catastrophic. Steel producers in Hamilton and Sault Ste. Marie operate on thin margins that cannot absorb tariff costs. Downstream fabricators face dual pressure from input cost increases and competitive disadvantage against tariff-exempt competitors.

Canadian aluminum production benefits from low-cost hydroelectric power, giving it a structural cost advantage and green premium. Chinese overcapacity continues to depress global steel prices, squeezing Canadian producers. The sector increasingly differentiates on low-carbon credentials, with Canadian aluminum producing 75% fewer emissions than the global average.