Trump’s re-election creates an ‘uncertain road’ for Canadian industry

News that Donald Trump had won the U.S. presidential election this week sparked a rush of memories for Jean Simard, the president and CEO of the Aluminum Association of Canada.
“We played in that movie some years ago,” he tells Global News.
Simard is referring to the first Trump term, when in 2018 the firebrand Republican president levied 10-per cent tariffs on Canadian aluminum and 25 per cent on steel. Back then, the tariffs drove up prices globally on those commodities and ended up hurting companies on both sides of the border who were forced to contend with higher costs or bow out of business.
This time, Simard worries that Trump will be emboldened by his familiarity with the Oval Office and adopt an “accelerated” policy schedule that sees the returning president act more quickly to enact a “highly protectionist agenda.”
“We understand that the agenda is America first, which means no friends, no allies,” he says.
But some industry representatives who spoke to Global News on Thursday say they see a path through Trump’s tariff threats and room to carve out exemptions in the U.S. strategy to acknowledge that Canada’s manufacturing and resources can be critical to American growth priorities.
“Still, it’s a very high risk and uncertain road at this point in time,” Simard says.
In the days since it’s become clear that Trump will return to the White House in 2025, Ottawa has started to mobilize resources to prepare for his second term.
Prime Minister Justin Trudeau announced Thursday that he has re-established the cabinet committee on Canada-U.S. relations in light of Trump’s victory.
Finance Minister and Deputy Prime Minister Chrystia Freeland will once again chair the committee, a role that saw her lead Canada’s renegotiations of the North American Free Trade Agreement during Trump’s first term.
Freeland was in Toronto on Thursday meeting with representatives of the Canadian steel industry to discuss the ramifications of the election.
During the campaign, Trump threatened to levy blanket tariffs of 10 per cent or more on all goods coming into the U.S., with even heavier trade restrictions placed on Chinese goods. He also said he would look to renegotiate the Canada-United States-Mexico Agreement (CUSMA), NAFTA’s replacement. The trade pact is up for renegotiation in 2026.
Catherine Cobden, president and CEO of the Canadian Steel Producers Association, says there’s “a lot at stake” for the country if the steel industry faces another round of tariffs like those imposed in 2018.
Canada’s steel sector employs roughly 123,000 people directly or indirectly, according to CSPA estimates. There are only really two markets for Canadian steel, and that’s Canada and the U.S., with about half of domestic production sent south of the border.
The 2018 tariffs were lifted for Canada just a year later, which Cobden says reflects how dangerous those trade barriers are to both economies.
“Tariffs on steel between the U.S. and Canada, we’re so highly integrated they really don’t work and they harm both sides,” she says.
Some economists have pointed out that trade policies aimed at boosting American manufacturing output by putting tariffs on Canadian goods could backfire on the U.S., given how interconnected North American supply chains have become.
An analysis by University of Calgary economist Trevor Tombe in October noted that many goods, particularly in the automotive sector, cross between Canada and the U.S. multiple times over the course of the manufacturing process, with multinational automakers relying on a porous cross-border assembly line.
A TD Bank report released last month argued that Canada should be able to avoid blanket tariffs under a Trump presidency due to the “likelihood that tariffs drag down the U.S. economy, disrupt supply chains, and stoke inflation.”
Simard says it’s not clear yet what form the proposed tariffs will take, whether they apply to all goods entering the U.S. indiscriminately or instead take the form of a lifting of existing exemptions on Canadian aluminum and steel.
A worst-case scenario that sees the U.S. impose the threatened 10-per cent tariffs across the board would see Canada’s real gross domestic product fall 2.4 percentage points over two years compared to a baseline scenario, TD projected.
But Simard argues that the U.S. growth strategy will only ramp up its demand for precious metals over the course of the next decade, and Canada remains the logical source.
“The choice is between Canada, Middle Eastern countries, or India. Make your pick. I think Canada is still the preferred supplier for all the U.S. industries,” he says.
That interconnectivity of automotive supply chains in North America is a reason for optimism in the face of Trump’s threats, says Brian Kingston, the CEO of the Canadian Vehicle Manufacturers Association.
“Parts, components into the automotive supply chain go back and forth across the border numerous times before they end up in a finished vehicle. So obviously putting tariffs in place would be extremely challenging,” Kingston says.
Canada and the U.S. have so far demonstrated shared priorities as global trade flows shift — namely against China. Both nations levied 100-per cent tariffs on Chinese-made electric vehicles, with Canada also putting 25-per cent tariffs on China’s steel and aluminum.
Cobden says there’s more the steel industry needs to do to improve the reliability of the Canadian supply chain, but argues recent moves like the Chinese tariffs and efforts to boost transparency in steel supply “align” the two trading partners.
“I really remain hopeful that all of that work helps us continue to demonstrate to the United States that we are a fair … trading partner that shares much of the same concern around unfair traders in our marketplace, and that we are stronger working together than working at odds with one another,” she says.
Kingston argues that the U.S.’s efforts to “decouple” from China set up a situation where Canada could fill a role, particularly on EV production. He urges Canadian governments to speed up the processes for mining infrastructure to show the U.S. that the domestic industry is ready to rise to the moment.
“If a Trump administration moves more aggressively on its approach to China, Canada is perfectly placed to be that strong partner and ally and to help that transition take place. So I think there is an opportunity,” he says.
“If we combine that with an effort to increase our mining capacity and be that supplier of choice to the Americans, I think we could come out of this in a much better position.”
Simard says he’s been having conversations with government officials and industry players for weeks in preparation for a possible Trump presidency. He says he’s been “very active” speaking with Freeland and Canada’s ambassador to the United States to make sure the aluminum industry has a “seat at the table” when negotiations around tariffs and CUSMA begin under a second Trump term.
“Team Canada is back again, and we have to do this in a unified, nonpartisan way involving unions, workers, communities, everybody,” Simard says. “It’s very important. And we don’t have a second kick at the can.”