FACTS VS FICTION

Mexico questions Trump’s ‘unfair’ steel tariffs, highlights trade deficit

Reuters | February 11, 2025

Mexican Economy Minister Marcelo Ebrard.

 Credit: Marcelo Ebrard via X


Mexico’s government on Tuesday questioned the fairness of a 25% tariff ordered by US President Donald Trump on its steel and aluminum imports, stressing that Mexico buys more steel from the US than it exports to its northern neighbor.


Mexican Economy Minister Marcelo Ebrard said the announced tariffs were unfair and unjustified because the US runs a steel and aluminum trade surplus with Mexico.

Speaking at a regular government press conference, Ebrard pointed to data showing Mexican steel shipments to the US falling since 2022, while Mexico’s imports of US steel grew in the same period.

“That tariff is not justified,” said Ebrard. “It’s unfair according to President Trump’s own arguments. Because we, I repeat, have more (steel) imports than exports.”

Later on Tuesday, Mexico’s steel chamber Canacero warned that the US duties would harm the local industry as well as supply chains across North America. It called for retaliatory tariffs on US steel if Mexican exports are not exempted from the duties.

In a statement, the chamber urged Mexican authorities to protect the national industry, noting that the threatened tariffs would hit three quarters of Mexican steel exports worth $2.1 billion.

Nearly a quarter of all steel used in the US is imported, and Mexico is among its largest suppliers, with Canada and Brazil.

Trump on Monday raised tariffs on steel and aluminum imports to a flat 25% “without exceptions or exemptions,” in a move he hopes will aid the struggling US industries.

However, the move risks fueling a trade war with Mexico, its top trading partner. The steel and aluminum tariffs are set to take effect on March 12.

A separate, paused, across-the-board 25% tariff on all US imports from Mexico and Canada is set to come into force on March 4.

Ebrard did not say if Mexico planned reciprocal tariffs on US steel or aluminum.

He said he plans to speak next week with the US commerce secretary and the US trade representative, pending their Senate confirmations.

The latest Trump tariff announcement is similar to duties he slapped on the metals during his previous term, from which Mexico was later exempted.

At the time, those tariffs pushed up prices for finished cross-border trade goods that use the metals, such as autos and appliances.

Shares in Mexican miner Industrias Penoles fell 5% on Tuesday while Grupo Mexico was down more than 1%.

Significant global steel producers in Mexico include ArcelorMittal and Ternium.

Josh Spoores, a North American steel analyst for business intelligence company CRU Group, confirmed Mexico runs a trade deficit on steel with the United States. He said it was hard to assess longer-term consequences of the US tariffs because it would largely depend on what retaliatory measures Mexico takes.

“It’s dynamic in the sense that we expect trade retaliation to come,” Spoores said.

“Potentially, they (Mexico) could put tariffs on steel coming from the United States… that could impact the supply in the United States,” he added.

(By Brendan O’Boyle, Stefanie Eschenbacher and Noe Torres; Editing by Aida Pelaez-Fernandez, Nick Zieminski and Rod Nickel)

Trump's Trade Policies  WAR Threaten UK Steel Industry

By City A.M - Feb 11, 2025

The UK steel industry is concerned that President Trump's 25 percent tariffs on steel and aluminum imports will severely harm their exports.

Last year, the UK exported 165,000 tons of steel to the US, valued at £388 million, which is now threatened by these tariffs.

While the UK government is taking a "wait and see" approach, some economists advise against retaliatory tariffs, suggesting they would only increase economic pain.


The UK steel industry could suffer a “devastating blow” if President Donald Trump imposes new 25 per cent tariffs on all steel and aluminium imports, an industry body has warned.

Speaking from Air Force One last night, Trump said he will impose a 25 per cent duty on steel and aluminium imports entering the US.

He did not confirm whether this will replace or be levied on top of existing steel duties, but warned that it would impact “everybody”.

Gareth Stace, director general of UK Steel, said: “It is deeply disappointing if President Trump sees the need to target UK steel, given our relatively small production volumes compared to major steel nations.”

“The imposition of US tariffs on UK steel would be a devastating blow to our industry,” he added.

Last year the UK exported 165,000 tonnes of steel to the US, worth £388m.

Stace said the UK produced steel that “simply cannot be replicated elsewhere” for sectors like defence, aerospace, and other critical sectors.

Speaking on Times Radio, Paul Johnson, director of the Institute for Fiscal Studies, said the tariffs “may well be enough to end that particular bit of our steel exports.”

Asked about the steel tariffs, Home Office minister Angela Eagle said the government will have to “wait and see” exactly what Trump means.

“We have a very balanced trading relationship with the US – I think £300bn worth of trade between our countries – and I think it’s in the best interests of both of us, as longstanding allies and neighbours, that we carry on with that balanced trade,” she said.

Tom Clougherty, executive director at the Institute of Economic Affairs, said the UK should not impose retaliatory tariffs on the US.

“Tariffs are a tax on domestic consumers,” he said. “That logic doesn’t change just because other countries impose tariffs on the import of your goods. Retaliatory tariffs simply add to the pain.”

Alongside his steel announcement, Trump also said he would announce reciprocal tariffs later this week on countries who levy tariffs on US imports.

The measures will be put in place “almost immediately” after being announced, he said.

The comments come shortly after China put in place retaliatory tariffs on a range of US goods, including energy commodities, agricultural machinery and high-performance cars.

Victor Gao, a Chinese diplomat and economist, told the BBC that the tariffs were “truly tit-for-tat because China wants to have free trade for all of these things”.

Trump put in place a 10 per cent blanket duty on all Chinese imports last week.

Kathleen Brooks, head of research at XTB, said the measures “essentially start a new trade war between the two largest global economies”.

Despite the tariff news, markets were largely unfazed, with European markets rising in early trade while Asian markets closed higher on Monday too. US futures were also called to open higher.

“Risky assets are getting a bit desensitized to Trump’s tariff announcement,” Mohit Kumar, an analyst at Jefferies said.


Derren Nathan, head of equity research, Hargreaves Lansdown said “markets are largely taking unfolding events in their stride”.

By City AM

Tariff Threats and Demand Shifts Impact Steel Prices

By Metal Miner - Feb 12, 2025

Steel mills are pushing for price increases following a weak fourth quarter, but whether this momentum continues is uncertain due to potential tariffs and demand fluctuations.

While manufacturing data suggests a recovery, the threat of tariffs could increase material costs and weigh on demand, further complicating the steel market's outlook.

The 2025 steel market is expected to be optimistic overall, driven by factors like onshoring and infrastructure investments, but it is unlikely to reach the peak prices seen in 2020 and 2021.


The Raw Steels Monthly Metals Index (MMI) remained sideways, with a modest 0.78% increase from January to February. However, steel prices could still be in for significant volatility.


Mills Push for Price Increases After Weak Q4

As Q4 financial results started to pour in, they reflected a challenging end to 2024. While data from Cliffs has yet to be published, total combined shipments from Nucor, SDI and U.S. Steel hit their lowest level in two years. U.S. Steel described the quarter as “a sequentially weaker average selling price and demand environment.” However, Nucor noted that “market conditions are starting to improve.”


Source: MetalMiner Insights, Chart & Correlation Analysis Tool

By the start of 2025, U.S. steel prices started to perk up. As of Feb. 7, hot rolled coil prices hit their highest level since June at $719/st. Friday’s price marks a 9.77% increase from their 2024 low in late July. A number of mills began issuing price hikes, as buyers reported mills were increasingly less willing to negotiate prices.

Will the Steel Price Uptrend Continue?

Whether mills will be able to maintain upside momentum remains in question. With the threat of 25% tariffs on imports from Mexico and Canada paused, market concerns over an impending supply disruption started to dissipate. Some believed the delay signaled a deal could be reached to avoid those tariffs altogether.

By Sunday, Feb. 9, however, concerns reappeared. Trump told reporters he plans to announce 25% tariffs on all steel and aluminum imports. While he did not indicate when those duties would be applied, he stated they would be applied to all importing countries.

Aside from new trade barriers, demand conditions will remain a driving force behind steel prices. On that side of the coin, the ISM Manufacturing PMI returned to growth for the first time since April 2024 in January, hitting its highest level since August 2022.

While such support could signal the nascent signs of recovery following a protracted recession in the U.S. manufacturing sector, it is unclear whether market conditions can maintain this trend. Tariffs would substantially increase material costs, which could weigh on demand.

Production Levels Remain Suppressed

Meanwhile, steel producers continue to suppress production levels, holding output well beneath trend levels from the first half of 2024. According to U.S. raw steel production data from the American Iron and Steel Institute, falling prices forced mills to keep a significant amount of capacity offline following planned maintenance outages throughout Q3 2024. Despite capacity discipline, mill lead times have yet to reflect a meaningful shift in the market balance.


Source: MetalMiner Insights, Chart & Correlation Analysis Tool

As of early February, HRC lead times remained sideways. Longer lead times would suggest tightening supply conditions, which typically triggers a steel price uptrend. One mill source noted that while demand appeared steady, buyers were waiting to see consistently longer mill lead times before placing large orders.

Buyer caution could derail the upward price momentum witnessed in recent weeks. However, tariffs risk spooking manufacturers into committing to larger purchases, which in turn, would cause lead times to lengthen.

2025 Steel Price Outlook

As mills await a demand rebound, the coming months appear somewhat uncertain. HRC three-month futures continue to trend sideways. This indicates that markets do not yet expect an impending steel price uptrend, as HRC futures historically serve as a leading indicator for HRC price trend shifts. However, announcements from Trump could significantly shift market conditions, which would have knock-on impacts on steel prices.


Source: MetalMiner Insights, Chart & Correlation Analysis Tool

Meanwhile, Nucor’s Q1 outlook appeared cautious. The mill told investors, “We expect earnings in the steel mills and steel products segments to be similar in the first quarter of 2025 as compared to the fourth quarter of 2024.” Considering the challenging market conditions that plagued mill earnings during the final quarter of last year, Nucor’s statements do not suggest particularly bullish expectations.

The Next Bull Market May Not Hit Peaks Seen in 2021

Although it might get off to a slow start, 2025 appears optimistic overall. According to SDI CEO Mark Millet, “We believe the market dynamics are in place to support increased demand across our operating platforms in 2025. Steel pricing has stabilized, and customer optimism continues to be solid across our steel operations, as demand continues to be steady.”

Strong demand fundamentals served to underpin the positive forecast. As Millet stated, “The continued onshoring of manufacturing businesses, combined with the expectation of significant fixed asset investment to be derived from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs, will competitively position the domestic steel industry.”

While rising demand will support prices, shortages and extreme tightness are not expected to materialize, which will cap future gains. Currently, constrained steel output means mills have significant capacity to spare when market conditions meaningfully rebound.

While producers will likely aim to maintain control over the supply-demand balance to maintain an uptrend, the next bull market will likely fall far short of what was seen throughout 2020 and 2021, which saw HRC prices reach an all-time high of $1,929/st.

By Nichole Bastin

A timeline of Canada-U.S. tariffs on steel and aluminum

By The Canadian Press

February 10, 2025 

Rolls of coiled coated steel are shown at Stelco in Hamilton 

 THE CANADIAN PRESS/Peter Power

U.S. President Donald Trump says he will impose 25 per cent tariffs on all steel and aluminum imports, including products from Canada — a threat causing economic uncertainty across the country.

Here’s a look back at the impacts of Trump’s previous steel and aluminum tariffs on Canadians.

March 2018

Trump announces his intent to impose 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports. They come into force June 1.

May 31, 2018


Canada announces its intent to impose retaliatory tariffs on the United States.

July 1, 2018

Canada’s retaliatory tariffs take effect on $16.6 billion in U.S. exports to Canada, including steel, aluminum and other products from the U.S. like Florida orange juice and ketchup. The government deliberately targets products with large manufacturing bases in the states of key Republicans.

Steel pipe maker Tenaris SA temporarily lays off 40 workers and reorganizes its production in Sault Ste. Marie, Ont., the first publicly-disclosed job losses in Canada resulting from the U.S. steel tariffs.

May 17, 2019

The United States and Canada announce an agreement to lift tariffs on Canadian steel and aluminum, as well as Canada’s retaliatory tariffs. Both governments lift their respective tariffs three days later.

August 2019

Statistics Canada releases data on the impacts of tariffs on trade showing exports of both steel and aluminum to the United States falling sharply after May 2018. Steel exports fell 38 per cent in June 2018 and by May 2019 were at their lowest level in almost 10 years. Aluminum exports were on average 19 per cent lower during the year the tariffs were in place, compared to 2017.

Canada’s import of U.S. steel products also fell, with the monthly average value between July 2018 and May 2019 being 30.5 per cent lower than during 2017.

In June 2019, after the tariffs were lifted, Canadian exports of steel products to the U.S. grew almost 16 per cent and the export of aluminum products grew 47 per cent.

Aug. 6, 2020


Trump announced a plan to impose a new 10 per cent tariff on Canadian aluminum imports, taking effect on Aug. 16, 2020.

Sept. 15, 2020

The United States calls off the tariffs, agreeing to withdraw current penalties before Canada’s retaliatory measures take effect.

May 2024

The Tax Foundation releases a report saying section 232 tariffs on steel and aluminum started by Trump in his first term — including the ones on Canada — had a negative impact on the U.S. economy, causing an estimated 75,000 job losses.

November 2024

Trump threatens to impose 25 per cent tariffs on Canadian and Mexican products on Jan. 20, 2025, his inauguration day, due to border security issues around fentanyl and illegal immigration. He later adds the trade imbalance between Canada and the U.S. to his list of reasons for imposing tariffs.

December 2024

Canada announces a $1.3-billion border security plan to “bolster border security” and disrupt the flow of fentanyl.

Feb. 1, 2025

Trump signs an executive order to hit Canada with 25 per cent tariffs — with a lower 10 per cent duty for energy.

Prime Minister Justin Trudeau holds a news conference in the evening to announce that Canada will respond with an immediate $30-billion retaliation package, which will be followed by $125 billion in duties on American products in 21 days to give companies and supply chains time to find alternatives.

Feb. 3, 2025

U.S. tariffs against Canada and Mexico are delayed for 30 days. Canada and the provinces also halt their moves to retaliate, including with tariffs and bans on U.S. alcohol sales north of the border.

Feb. 9, 2025

Trump says he will formally announce 25 per cent tariffs on all steel and aluminum imports, including from Canada and Mexico, on Monday.

Feb. 10, 2025

Trump has signed executive orders to slap 25 per cent tariffs on all steel and aluminum imports into the United States, including Canadian products, starting March 4.

Bea Bruske, president of the Canadian Labour Congress, says Trump’s previous steel and aluminum tariffs had a “devastating impact” on Canadian workers.

“Thousands of workers faced layoffs and uncertainty, and the effects rippled across manufacturing, construction and supply chains,” Bruske says, adding that 2,000 workers and 500 employers relied on emergency government support.

With files from Kelly Geraldine Malone and The Associated Press.

This report by The Canadian Press was first published Feb. 11, 2025.



Trump steps up his 2018 tariffs on steel and aluminum, risking inflation on promise of more jobs

By The Associated Press
February 10, 2025 

U.S. President Donald Trump listens to a question from a reporter as he signs executive orders in the Oval Office at the White House, Monday, Feb. 10, 2025, in Washington. (Photo/Alex Brandon) (Alex Brandon/AP)

U.S. President Donald Trump on Monday removed the exceptions and exemptions from his 2018 tariffs on steel, meaning that all steel imports will be taxed at a minimum of 25%. Trump also hiked his 2018 aluminum tariffs to 25% from 10%.

“We were being pummeled by both friend and foe alike,” Trump said as he signed two proclamations changing his orders during his first term that go into effect on March 4. “It’s time for our great industries to come back to America.”

The moves are part of an aggressive push by the president to reset global trade, with Trump saying that tax hikes on the people and companies buying foreign-made products will ultimately strengthen domestic manufacturing. But the tariffs would hit allies as the four biggest sources of steel imports are Canada, Brazil, Mexico and South Korea, according to the American Iron and Steel Institute.

Trump also intends this week to reset U.S. taxes on all imports to match the same levels charged by other countries. All of that comes on top of the 10% tariffs he already put on China, China’s retaliatory tariffs that started Monday and the U.S. tariffs planned for Canada and Mexico that have been suspended until March 1.

Monday’s tariffs almost immediately drew criticism from Canada, the largest source of steel imports. Candace Laing, president and CEO of the Canadian Chamber of Commerce, said that Trump was a destabilizing force in the global economy.


“Today’s news makes it clear that perpetual uncertainty is here to stay,” said Laing.

The tariffs carry inflation risks at a moment when voters are already weary of high prices and fearful that price increases will eclipse any income gains. Trump maintains that the tariffs will level the playing field in international trade and make U.S. factories more competitive, such that any pain felt by consumers and businesses would eventually be worthwhile.

“‘Fairness’ is in the eye of the beholder, but the more fundamental question is whether the U.S. actually benefits from such new tariffs,” Benn Steil, director of international economics at the Council on Foreign Relations, a New York-based nonpartisan think tank, said in an email. “The costs to the U.S. will include higher prices to U.S. consumers, retaliatory tariffs abroad, and the loss of U.S. jobs and competitiveness in firms hit by higher input costs.”

Steil noted that other countries are already adopting Trump’s approach from his first term as the president imposes tariffs on the premise that the imports create national security risks. That’s because national security-related tariffs are legally unchallengeable at the World Trade Organization, meaning that so far Trump’s approach has encouraged other countries to increase trade barriers.

“Not surprisingly, everything from ‘door frames’ to ‘alcoholic beverages’ have of late been subject to new import barriers in the developing world on the grounds of national security,” Steil said.

Of the roughly 29 million net tons of steel imported into the United States last year, a little under 2% came from China. But the White House maintains that exemptions to the tariffs provided over the previous four years by the Biden administration enabled steel and aluminum from China and Russia to go through other nations to reach the United States.

While the tariffs could help the finances of steel mills and aluminum smelters, they could also increase costs for the manufacturers that use the metals as raw materials to make autos, appliances and other products.

Glenn Stevens Jr., executive director of MichAuto, said that the auto industry would likely need to raise prices in response to the tariffs. In turn, higher prices would decrease sales and hurt company’s bottom lines, leading to fewer factory jobs.

“If you look at sudden tariffs to a system, there isn’t a lot of good that comes out of that,”said Stevens, his remarks challenging Trump’s own statements that his policies would stimulate massive gains in auto industry jobs.

The White House has yet to fully counter economic analyses showing that tariffs would hurt growth and intensify inflation, only saying that such analyses are incomplete without including the full extent of Trump’s planned income tax cuts and regulatory curbs. But Trump has yet to propose a budget plan that would flesh out his policies so that economists can judge them.

Consumers already appear to be anticipating that inflation will become a bigger problem. On Friday, the preliminary February results from the University of Michigan Survey of Consumers found that year-ahead inflation expectations jumped to 4.3% from 3.3% a month prior.


The government inflation report scheduled to be released on Wednesday is expected by economists to show consumer prices rising at 2.8%, which would suggest that the public sees tariffs as a major risk to their financial wellbeing.

The stock prices of steel companies climbed sharply on Monday as investors assumed the tariffs would increase their profits. Cleveland-Cliffs, which wants to buy Pittsburgh’s U.S. Steel, surged upward by nearly 18%. U.S. Steel rose almost 5%. Nucor increased almost 6%, and Steel Dynamics rose about 5%.

But some companies that could pay more for steel and aluminum saw their share prices decrease. For example, shares in automaker General Motors sold off, which could ultimately signal trouble for a manufacturing sector that Trump has promised to revive.

“We have far more steel and aluminum-consuming businesses, think construction, machinery and equipment manufacturing, auto manufacturing, than we do steel and aluminum producers, so the advantage created for the producers comes at a much greater cost to downstream users,” said Erica York, vice president of federal tax policy at the right-leaning Tax Foundation.

Trump reiterated as he signed the proclamations that more tariffs would be coming on computer chips, autos and pharmaceutical drugs. But the president said that the import taxes would eventually enable more steel mills and aluminum plants to open in the U.S. to avoid the tariffs.

“You’re ultimately going to have a price reduction because they’re going to make their steel here,” said Trump, adding that there would also be more jobs.

Howard Lutnick, Trump’s pick to be commerce secretary, said that the strengthened tariffs would bring 120,000 jobs back to the United States. It wasn’t clear how he reached that number. The primary metals industry added roughly 14,000 jobs during the first 12 months the steel and aluminum tariffs were originally imposed, though gains were quickly erased by the coronavirus pandemic in 2020.

Panos Kouvelis, a professor specializing in supply chains at Washington University in St. Louis, co-wrote a research paper last year finding that the 2018 tariffs did not deliver a stronger manufacturing sector as Trump had promised.

“Simple economics will tell you if prices go up then demand will go down,” Kouvelis said, stressing that what was needed instead were incentives that were specific to advanced technologies, national security needs and pharmaceutical needs.

“It requires smart, targeted industrial policies,” he said, “instead of general tariffs on everything.”

 

US tariffs would stack for Canada, official says as countries condemn Trump moves

Reuters | February 11, 2025 |  

An electric arc furnace at US Steel Big River Steel operation. (Image: US Steel)

US President Donald Trump’s planned 25% tariffs on steel and aluminum imports would pile on top of other levies on Canadian goods, resulting in a total 50% tariff if threatened duties on all imports from Canada are enacted in March, a White House official said on Tuesday.

Canada has not been told about the additive nature of the tariffs, a Canadian government source told Reuters, adding that it “sounds plausible.”

Mexico, Canada and the European Union condemned Trump’s metals tariffs on Tuesday and governments around the world braced for even more levies from the new administration amid fears of an escalating global trade war.

Businesses around the United States also warned of fallout, with many manufacturing-heavy companies finding it difficult to plan next steps or determine if Trump will follow through. The tariff hike would reverberate across the supply chain, affecting all businesses that rely on the materials, they said.

Trump signed proclamations late on Monday raising the US tariff rate on aluminum to 25% from his previous 10% rate and eliminating country exceptions and quota deals as well as hundreds of thousands of product-specific tariff exclusions for both metals.

The measures, due to take effect on March 12, will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the US duty free under the carve-outs.

Mexican Economy Minister Marcelo Ebrard called the tariff decision “not justified” and “unfair.” He did not say if Mexico planned reciprocal tariffs on steel or aluminum it imports from the United States.

Canadian Prime Minister Justin Trudeau said the tariffs were “unacceptable.” Canada’s response, if needed, would be firm and clear, he said at an artificial intelligence summit in Paris.

The Canadian Press, citing a senior government official, said Trudeau spoke with US Vice President JD Vance about the impact the steel tariffs would have in Ohio, which Vance previously represented in the US Senate.

Vance was also planning to discuss trade and economic issues with European Commission President Ursula von der Leyen at the Paris summit after she said the 27-nation bloc would take “firm and proportionate countermeasures” to the new tariffs.

Ready to retaliate

Von der Leyen said she deeply regretted the US decision, adding that tariffs were taxes that were bad for business and worse for consumers. EU steel exports to the US have averaged about 3 billion euros ($3.1 billion) a year over the past decade.

“Unjustified tariffs on the EU will not go unanswered – they will trigger firm and proportionate countermeasures,” she said in a statement.

One option for the EU would be to reactivate the tariffs it imposed in 2018 during Trump’s first term, which were suspended under an agreement with his predecessor, President Joe Biden.

The EU tariffs on US products such as bourbon, motorcycles and orange juice are currently suspended until the end of March.

The American Chamber of Commerce to the EU (AmCham EU), representing US companies active in Europe, also criticized the move as harmful to jobs, prosperity and security on both sides of the Atlantic.

“The damage will extend beyond just the steel and aluminum sectors, impacting all businesses that rely on these materials throughout the supply chain,” it said in a statement.

Cost and chaos

Executives across industries reliant on steel and aluminum imports were scrambling to offset the cost of Trump’s move after previous tariff threats from the White House that were later scrapped.

Companies ranging from Coca-Cola and Ford to smaller aluminum, aerospace and appliance firms expect to be affected by Trump’s moves, which Ford CEO Jim Farley said have so far added “a lot of cost and a lot of chaos” to American business.

The Coalition of American Metal Manufacturers and Users (CAMMU) said failure to include a workable exclusion process would hurt US manufacturers, and especially small- and medium-sized businesses that were left paying significantly more for inputs to their production.

“Foreign customers are shifting their supply chains away from US producers. Once removed, especially for smaller, family-owned businesses, it is difficult to regain that lost business,” the group said.

It said the threat of retaliatory tariffs from key trading partners further threatened US exports and manufacturing jobs, stalling expansion plans and teeing up difficult choices on investments, retention and long-term growth.

Steel imports accounted for about 23% of American steel consumption in 2023, according to American Iron and Steel Institute data, with Canada, Brazil and Mexico the largest suppliers.

Canada accounted for nearly 80% of US primary aluminum imports in 2024.

Trump also will impose a new North American standard requiring steel imports to be “melted and poured” and aluminum to be “smelted and cast” within the region to curb US imports of minimally processed Chinese and Russian metals that circumvent other tariffs.

While China exports only tiny volumes of steel to the US, it is responsible for much of the world’s excess steel capacity, according to the US. It says subsidized production in China forces other countries to export more and leads to trans-shipment of Chinese steel through other countries into the US to avoid tariffs and other trade restrictions.

($1 = 0.9684 euros)

(By Andrea Shalal, David Lawder, Phil Blenkinsop, David Ljunggren, Nora Eckert, Brendan O’Boyle, Doina Chiacu and Keith Weir; Editing by Nick Zieminski and Lincoln Feast)

Home builders warn of ‘brutal blow’ to housing sector from steel, aluminum tariffs

AND DON'T FORGET THE PERRENIAL 

TARIFF TARGET; SOFTWOOD LUMBER

By The Canadian Press

February 11, 2025 



A crane on a building under construction in Montreal, Thursday, November 14, 2024. THE CANADIAN PRESS/Graham Hughes(Graham Hughes/The Canadian Press)

Some developers say looming U.S. tariffs on Canadian steel and aluminum could be detrimental to the housing sector due to higher costs of key construction materials.

The Ontario Home Builders' Association, which represents more than 4,000 companies offering services such as development and renovation, said the tariffs could prompt an economic slowdown and lead to decreased investment in residential real estate.

The group’s CEO Scott Andison warned that could be “a brutal blow to the housing sector and therefore to housing affordability.”

“When you throw something as dramatic as trade tariffs into an environment that’s already suffering from low margins, high interest rates and high input costs, the potential for costs ... going up makes builders quite nervous,” he said in an interview

“This is just something that puts the development market into a bit of chaos.”


U.S. President Donald Trump signed an executive order on Monday to levy 25 per cent tariffs on steel and aluminum imports to his country beginning March 12 — a move that Canadian Chamber of Commerce president and CEO Candace Laing called “wrong on so many levels.”

Laing said Trump’s decision “makes it clear that perpetual uncertainty is here to stay.”

It comes amid Trump’s threat of 25 per cent across-the-board tariffs on Canadian imports, with a lower 10 per cent levy on Canadian energy. Trump has delayed those until at least March 4 in response to border security commitments.

Data from the U.S National Trade Administration shows the U.S. is Canada’s largest market for aluminum, with over three million tonnes exported to the U.S. last year.

BMO economist Robert Kavcic said Canada’s total steel and aluminum exports to the U.S. last year were $35 billion, or roughly one per cent of GDP.

Andison said an increase in the cost of construction materials would raise Canadian home prices at a time when the sector is already struggling to keep up with rising costs due to inflation.

He said input costs for materials such as lumber rose during the pandemic and never returned to pre-COVID levels.

“When you start making Canadian products less of interest to other markets such as south of the border in the U.S., that reduces the amount being produced because markets have decreased outside of Canada,” said Andison.

“And when you start reducing the amount that’s being produced, the cost of domestic sales obviously goes up.”

Potential retaliatory tariffs could also play a role in making housing more expensive, he said, noting around $20 billion in Canadian steel and aluminum products are sent south of the border per year.

Andison said two-way tariffs on a broad range of construction materials beyond just steel and aluminum — such as cement, gypsum and lumber — could drive up costs “into a crazy level that makes any construction unviable.”


“Right now, our builders can build homes, but the problem is that they would have to build them at a price that consumers cannot afford, particularly first-time homebuyers,” he said.

“They’re looking at numbers that are just in many ways outside of their scope.”

US Cannabis Industry Faces Debt Reckoning Without Bankruptcy Help


By Steven Church and Reshmi Basu
February 11, 2025

Nearly half of US states have legalized marijuana, while a number of others have decriminalized the drug or allow it for medicinal purposes.

 (Matthew Staver/Photographer: Matthew Staver/Blo)


(Bloomberg) -- If it were like most companies on the losing end of a boom and bust cycle, Schwazze could just turn to the US bankruptcy court to keep its creditors at bay while renegotiating its debt. But unlike most businesses, its product — marijuana — is still illegal in the eyes of the federal government.

That disadvantage will make it harder for Schwazze and other cannabis companies to win concessions from lenders just as a wave of debt that the industry borrowed in recent years to expand in states where weed is legal comes due. The biggest companies, those that operate in more than one state, have as much as $6 billion in debt maturing next year, according to Beau Whitney, chief economist at Whitney Economics, which specializes in the cannabis market.

The reckoning comes as the industry has failed to turn legal weed into reliable profits. In 2022 more than 42% of dealers reported making a profit, according to a survey by Whitney. By last year, the number had dropped to about 27%. Some who can’t consolidate will fail and go out of business. Many will be forced to refinance their debt at higher interest rates and onerous contractual covenants.

“There is a huge debt bubble that could have a significantly negative impact on the cannabis industry if not addressed,” Whitney said. “Refinancing this cycle will be at much higher interest rates and the businesses will not have the cash flow to manage it.”

Colorado-based Schwazze has hired advisers to help it figure out how to restructure debt it took on while opening a chain of dispensaries in two states, according to people familiar with the situation. It’s been able to push back the due date on some of its loans but it needs more cash, said the people, who asked not to be identified discussing a private matter. However, the workout needs to take place out-of-court because of the federal prohibition.

Nearly half of US states have legalized marijuana, while a number of others have decriminalized the drug or allow it for medicinal purposes. It remains fully illegal in just four states. About 79% of the US population lives in a county that has at least one dispensary, according to the Pew Research Center. Legal cannabis companies employed more than 450,000 people and sold more than $30 billion in product last year, Whitney said.

Federal law bars people from moving marijuana across state lines and treats it as a dangerous, Schedule I drug. Prosecutors generally do not take action against individual consumers, but the laws still limit banking services for the cannabis industry. And the US Trustee, the federal watchdog for the US bankruptcy system, has successfully blocked companies from filing for Chapter 11 protection.

Schwazze, whose formal name is Medicine Man Technologies Inc., has engaged Oppenheimer & Co. and Goodwin Procter as legal counsel for its talks, said the people. A group of the company’s creditors is working with Paul Hastings, they added.

The negotiations come as Schwazze received a default notice in December due to delays in its audited financial reports, according to public disclosures. The company had to switch independent auditors and restate annual results for 2022 and 2023 following the discovery of accounting errors. In July, Schwazze was able to push back the maturity on a $15 million loan with Altmore Capital and a $17 million promissory note with Reynold Greenleaf & Associates that were due this month, according to public disclosures.

Among its options, Schwazze is looking to get incremental capital and may seek a potential below-par exchange, which could result in a dilution of equity, the people said.

“It has been this way for years,” said industry lawyer Hilary Bricken with the Husch Blackwell law firm. “These lenders have the upper hand. The terms given to cannabis companies are onerous and draconian. It is not a friendly environment.”

Last year, the US Department of Justice started the process of classifying marijuana as a Schedule III, less dangerous substance, one of the industry’s primary goals because it would allow cannabis companies to deduct normal business expenses and push “hundreds, if not thousands, of businesses into profitability,” said Aaron Smith, co-founder of the National Cannabis Industry Association.

President Donald Trump’s incoming Attorney General, Pam Bondi, declined to say during her confirmation hearing last month whether she would cancel that process. The industry has been working for years to remove as many federal hurdles as possible, with limited success, despite the majority of Americans favoring legalization.

Colorado and Washington became the first states to legalize recreational marijuana about a dozen years ago, launching a wave of small starts ups run by enthusiastic, but inexperienced, entrepreneurs. As more states legalized, either for recreational use or as medicine, investors piled in and the number of licensed dealers and dispensaries exploded. Overall sales grew steadily, with a revenue boost hitting when the pandemic ended. That’s when companies loaded up on the debt that is coming due next year.

Today the market has matured with savvier, more professional operators pushing out the mom-and-pop startups, said Bricken, the marijuana lawyer who has been advising clients since the early days of legalization. There are only a handful of lenders left who are willing to invest in the industry, Bricken said, citing two of the biggest, Chicago Atlantic Group Inc. and Altmore Capital Investment Management.

“All of the stupid money has left the space,” she said.


Representatives for Chicago Atlantic did not return a request for comment. Altmore Capital declined to comment. Messages left with Schwazze, as well as with Oppenheimer, Goodwin Procter and Paul Hastings were not returned.

Cannabis companies have struggled to compete with unlicensed dealers, who can undercut legal sales because they don’t pay for a license, comply with regulations or face any taxes said. The US saw about $44 billion in illegal sales last year, according to cannabis market tracker BDSA.

“Unless there is federal intervention, through reform, then the industry is on the precipice of collapse and large firms from outside the cannabis industry will be positioned to take over, for pennies on the dollar,” Whitney said.

--With assistance from Fiona Rutherford.

©2025 Bloomberg L.P.

CRIMINAL CAPITALI$M

Wamco Loses $1 Billion From Calstrs in Major Pension Redemption

By Bloomberg News

February 14, 2025

The Western Asset Management Company headquarters in Pasadena, California, US, on Tuesday, Aug. 27, 2024. (Kyle Grillot/Bloomberg)

(Bloomberg) -- The California State Teachers’ Retirement System, the second-biggest US pension, is pulling its roughly $1 billion investment from Western Asset Management Co. as a reckoning continues over criminal fraud charges against the bond manager’s star trader Ken Leech.

The pension, which managed $353 billion as of Jan. 31, is in the process of withdrawing all of its money from Wamco following its investment team’s analysis of risks and returns in the fixed-income portfolio, Calstrs said in an emailed statement.

As recently as this summer, Wamco had the largest allocation, worth $1.1 billion, of any manager in Calstrs’ fixed-income portfolio.

A Wamco spokesperson declined to comment.

Wamco has been hit with a series of large redemptions since late August, when the Franklin Resources Inc. unit revealed that Leech faced a potential enforcement action. That has set off one of the biggest shakeups in the bond market in decades, leading to roughly $120 billion being pulled from Wamco through January.


Ohio’s Bureau of Workers’ Compensation, the Chicago Teachers’ Pension Fund and the Dallas Employees’ Retirement Fund are among clients pulling money from Wamco.

UBS Group AG, BlackRock Inc. and LM Capital Group are now the largest managers of Calstrs’ fixed-income portfolio, according to the pension.

US prosecutors criminally charged Leech in November, accusing him of “cherry picking” favorable trades for certain clients at the expense of others. Leech, who was Wamco’s co-chief investment officer, was granted $10 million bail and pleaded not guilty to fraud in a Manhattan court the following month.

Franklin said last month that it’s integrating much of Wamco into the parent and intends to leave the investment team in place.

©2025 Bloomberg L.P.

Cannabis company Aphria reaches agreement to settle shareholder class-action lawsuit

By The Canadian Press

February 10, 2025 

The Ontario Courthouse in Toronto is photographed on Monday, May 2, 2022. 

THE CANADIAN PRESS/Christopher Katsarov


Aphria Inc. has agreed to pay $30 million to settle a class-action lawsuit by shareholders alleging the company made misrepresentations to capital markets in 2018.

The settlement agreement said the deal is not an admission of liability by Aphria or the individual defendants, who denied all allegations.

The lawsuit alleged Aphria made misrepresentations in 2018 in connection with its acquisition of a company called Nuuvera Inc. and another deal for a company called LATAM Holdings Inc. that suggested their value was significantly higher than their actual worth.

It alleged that a substantial drop in Aphria’s share price following certain public disclosures that year amounted to a public correction of misrepresentations.

Aphria was acquired by Tilray Inc. in 2021.

In a regulatory filing, Tilray noted the payment will be primarily funded by an Aphria insurance policy and by the individual defendants. Aphria will fund the remaining unpaid portion estimated to about $8.5 million.

“Aphria’s portion of the settlement amount is fully accrued on its balance sheet and the settlement amount will not result in a negative impact to earnings,” Tilray said.

The settlement requires court approval. A hearing at the Ontario Superior Court is set for March 26.

This report by The Canadian Press was first published Feb. 10, 2025.

Air Canada may redeploy some American flights if Canadian travellers avoid U.S.

By The Canadian Press

February 14, 2025 

An Air Canada plane is moved to the runway at the Ottawa International Airport in Ottawa on Thursday, Oct. 3, 2024. 

THE CANADIAN PRESS/Sean Kilpatrick

Air Canada may reduce flights to certain U.S. destinations later this year if demand from travellers begins to lag, as the airline acknowledged Friday it is coping with uncertainty from the current economic environment, including the threat of tariffs.

The Montreal-based carrier is preparing in case customers decide to fly south of the border less often in 2025, said executive vice-president of revenue and network planning Mark Galardo.

But he cautioned that hasn’t yet been the case, with January booking trends aligning with the company’s expectations.

“We are anticipating proactively that there could be a slowdown,” Galardo told analysts on a conference call, as the airline reported its fourth-quarter earnings.

“In the U.S., we don’t see any major slowdown or anything substantial that would change our view of the market. That being said, if we could de-risk this a little bit and be a bit proactive and move capacity into other sectors we see strength in, I think that’s the right move right now in this context.”

Galardo said leisure destinations such as Florida, Las Vegas and Arizona could be affected if Canadians pull back on travel plans to the U.S.

He said there could be an opportunity to redeploy airplanes to domestic Canadian leisure markets instead.

“It’s still premature to discuss the potential impact, if any, of actual or potential regulatory tariffs or possible retaliations,” Galardo said.

“We’re diligently and continuously monitoring customer behaviour and market dynamics. If these shift in the future, we have ample flexibility to respond by moving capacity around as we’ve always done.”

Despite those preparations, Air Canada maintained its guidance for 2025. In its outlook, the airline said it expects its capacity measured by available seat miles to be up three to five per cent from 2024.

It expects its adjusted cost per available seat mile to range from 14.25 to 14.50 cents.

The carrier reported its adjusted cost per available seat mile for 2024 was 13.80 cents, an increase of 2.3 per cent from 2023.

In its fourth quarter, Air Canada reported a loss of $644 million, compared with a profit of $184 million in the same quarter a year earlier, as its operating revenue increased. The airline said its loss amounted to $1.81 per diluted share for the quarter ended Dec. 31, compared with earnings of 41 cents per diluted share a year ago.

Operating revenue for the quarter totalled $5.4 billion, up from $5.2 billion in the same quarter last year.

On an adjusted basis, Air Canada said it earned 25 cents per diluted share, compared with an adjusted loss of 12 cents per diluted share in the same quarter last year. Analysts on average had expected an adjusted profit of 26 cents per share, according to LSEG Data & Analytics.

“Overall, we view the results and maintained 2025 guide as positive,” said RBC analyst James McGarragle in a note.

“However, we believe sentiment will be driven by impacts on travel due to tariff uncertainty.”

Chief executive Michael Rousseau said the airline will “continue to navigate uncertainty and external pressures with prudence and decisiveness,” noting Air Canada is prepared to “adapt promptly to any changes or challenges that may arise.”

As of mid-morning, Air Canada shares were trading at $17.89 on the Toronto Stock Exchange, down 33 cents or around 1.8 per cent.

This report by The Canadian Press was first published Feb. 14, 2025.

Sammy Hudes, The Canadian Press

Trump signs a plan for reciprocal tariffs on U.S. trading partners, ushering in economic uncertainty

By The Associated Press

February 13, 2025 

WASHINGTON — WASHINGTON — U.S. President Donald Trump on Thursday rolled out his plan to increase U.S. tariffs to match the tax rates that other countries charge on imports, possibly triggering a broader economic confrontation with allies and rivals alike as he hopes to eliminate any trade imbalances.

“I’ve decided for purposes of fairness that I will charge a reciprocal tariff,” Trump said in the Oval Office at the proclamation signing. “It’s fair to all. No other country can complain.”

Trump’s Republican administration has insisted that its new tariffs would equalize the ability of U.S. and foreign manufacturers to compete, though under current law these new taxes would likely be paid by American consumers and businesses either directly or in the form of higher prices. The rates to be charged would be studied over the weeks ahead, which could create the potential space to resolve challenges or prolong a degree of suspense and uncertainty.

The politics of tariffs could easily backfire on Trump if his agenda pushes up inflation and grinds down growth, making this a high stakes wager for a president eager to declare his authority over the U.S. economy.

The tariff increases would be customized for each country with the partial goal of starting new trade negotiations. But other nations might also feel the need to respond with their own tariff increases on American goods. As a result, Trump may need to find ways to reassure consumers and businesses to counteract any uncertainty caused by his tariffs.


The United States does have low average tariffs, but Trump’s proclamation as written would seem designed to jack up taxes on imports, rather than pursue fairness as the United States also has regulatory restrictions that limit foreign products, said Scott Lincicome, a trade expert at the Cato Institute, a libertarian think tank.

“It will inevitably mean higher tariffs, and thus higher taxes for American consumers and manufacturers,” he said. Trump’s tariffs plan “reflects a fundamental misunderstanding of how the global economy works.”

Trump’s proclamation identifies value-added taxes — which are similar to sales taxes and common in the European Union — as a trade barrier to be included in any reciprocal tariff calculations. Other nations' tariff rates, subsidies to industries, regulations and possible undervaluing of currencies would be among the factors the Trump administration would use to assess tariffs.

A senior White House official, who insisted on anonymity to preview the details on a call with reporters, said that the expected tariff revenues would separately help to balance the expected US$1.9 trillion budget deficit. The official also said the reviews needed for the tariffs could be completed within a matter of weeks or a few months.

The possible tax increases on imports and exports could be large compared to the comparatively modest tariffs that Trump imposed during his first term. Trade in goods between Europe and the United States nearly totaled $1.3 trillion last year, with the United States exporting $267 billion less than it imports, according to the Census Bureau.

The president has openly antagonized multiple U.S. trading partners over the past several weeks, levying tariff threats and inviting them to retaliate with import taxes of their own that could send the economy hurtling into a trade war.

Trump has put an additional 10% tariff on Chinese imports due to that country’s role in the production of the opioid fentanyl. He also has readied tariffs on Canada and Mexico, America’s two largest trading partners, that could take effect in March after being suspended for 30 days. On top of that, on Monday, he removed the exemptions from his 2018 steel and aluminum tariffs. And he’s mused about new tariffs on computer chips and pharmaceutical drugs.

But by Trump’s own admission, his separate tariffs for national security and other reasons would be on top of the reciprocal tariffs, meaning that the playing field would not necessarily be level.

In the case of the 25% steel and aluminum tariffs, “that’s over and above this,” Trump said. Autos, computer chips and pharmaceuticals would also be tariffed at higher rates than what his reciprocal plan charges, he said.

The EU, Canada and Mexico have countermeasures ready to inflict economic pain on the United States in response to Trump’s actions, while China has already taken retaliatory steps with its own tariffs on U.S. energy, agricultural machinery and large-engine autos as well as an antitrust investigation of Google.

The White House has argued that charging the same import taxes as other countries do would improve the fairness of trade, potentially raising revenues for the U.S. government while also enabling negotiations that could eventually improve trade.

But Trump is also making a political wager that voters can tolerate higher inflation levels. Price spikes in 2021 and 2022 severely weakened the popularity of then-President Joe Biden, with voters so frustrated by inflation eroding their buying power that they chose last year to put Trump back in the White House to address the problem. Inflation has risen since November’s election, with the government reporting on Wednesday that the consumer price index is running at an annual rate of 3%.

The Trump team has decried criticism of its tariffs even as it has acknowledged the likelihood of some financial pain. It says that the tariffs have to be weighed against the possible extension and expansion of Trump’s 2017 tax cuts as well as efforts to curb regulations and force savings through the spending freezes and staff reductions in billionaire adviser Elon Musk’s Department of Government Efficiency initiative.

But an obstacle to this approach might be the sequencing of the various policies and the possibilities of a wider trade conflict stifling investment and hiring amid the greater inflationary pressures.

Analysts at the bank Wells Fargo said in a Thursday report that the tariffs would likely hurt growth this year, just as the possibility of extended and expanded tax cuts could help growth recover in 2026.

Trump tried to minimize the likelihood that his policies would trigger anything more than a brief bump in inflation. But when asked if he would ask agencies to analyze the possible impact on prices, the president declined.

“There’s nothing to study,” Trump said. “It’s going to go well.”

___

Josh Boak, The Associated Press