Despite tariff reprieve, aluminum industry expected to keep investment under wraps – by Niall McGee (Globe and Mail – March 12, 2018)

After receiving a stay of execution on punitive import tariffs imposed by the United States the Canadian aluminum industry can breathe a little easier, but companies are unlikely to make major investment decisions under the status quo.

On Thursday, U.S. President Donald Trump exempted Canada and Mexico from new 10-per-cent aluminum tariffs that will soon apply to the rest of the world. The final outcome for Canada will depend on how the ongoing North American free-trade agreement talks proceed, the President said.

Mr. Trump justified the tariffs on national security grounds, specifically the need to secure a domestic supply of metals such as aluminum, for the manufacture of military equipment.

Canada – historically a staunch U.S. military ally – is the largest supplier of aluminum to the United States, accounting for 44 per cent of its imports, according to TD Securities Inc. The Canadian aluminum industry employs roughly 10,000 people at 10 smelters, nine of which are in in Quebec. About 80 per cent of domestic production goes to the United States.

Canadian-based producers have spent $13-billion over the past 15 years to modernize smelting facilities.

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