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Cake day: March 8th, 2025

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  • I read recently that the Aluminium industry will be mostly unaffected. It’s difficult to see how the US would be able to replace Canadian steel imports in the short term, especially not before the next US election. In saying that, I’ve no clue how quickly a country like the US can increase its manufacturing capacity to produce an additional 25% of their steel consumption.

    Manufacturers may also be anxious to invest in an expansion like that when there’s no guarantee that the tariffs will remain in place to keep their product competitive, although there’s always the ever reliable lobbying.

    If the tariffs had been applied to Canada alone, then it might have become cheaper for US businesses to import from elsewhere, but since the tariffs are a universal 25%, the playing field remains more or less unchanged for all steel imports to the US.

    Over time, maybe the US will successfully build up its steel industry and replace their Canadian imports with domestic supply. Hopefully that’s more than enough time for Canada to diversify its trade relationships.

    My guess is that this particular Tantrump will be inflationary for all of North America more than anything else.