Morning Market Brief February 12, 2025

Aluminum and steel tariffs are on the way

Earlier this month, a widespread 25% tariff on Canadian exports to the US was delayed for 30 days. However, Canada will still face tariffs beginning in March. US President Donald Trump signed an executive order for a 25% tariff on steel and aluminum imports with no exceptions. Canada is a major supplier of both metals to the US, which might drag down trade activity and hinder economic growth.

• President Trump announced a 25% tariff on all steel and aluminum imports into the US. He hopes the tariffs will protect domestic production and increase jobs in the US.
• These tariffs will take effect on March 12. They will be implemented on all imports of steel and aluminum, with no exceptions. This includes Canada and Mexico, which are both major suppliers of the two metals to the US.
• The tariffs will also apply to finished metal products. The US administration believes this is necessary to halt efforts by China and Russia to avoid current duties.
• In response to the tariffs, Canadian Prime Minister Justin Trudeau said they were “entirely unjustified.” He noted that the federal government is speaking to US officials about the drawbacks to these tariffs for both economies. The Prime Minister noted that he hopes the two sides can come to an agreement before Canada will need to reciprocate with its own tariffs.

Global trade tensions are percolating. It appears likely that many other major trade partners of the US will respond with tariffs of their own. This could have a significant impact on global economic activity. Canada’s government is continuing negotiations to try to avoid tariffs altogether. Several reports have shown that tariffs on Canadian goods will detract from economic growth, making the negotiations vital to the short-term strength of the Canadian economy.

At?CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.