It’s already practically uneconomical to so, Canada produces about 4x more Aluminium than the US and the US imports about 80% of the Canadian production.
Canada doesn’t have to budge on this one, the US can’t just spin up that much Aluminium production in any reasonable time line, they’re going to keep importing it and just paying the tariff themselves.
Not just aluminum, but building factories for anything takes years nowadays. The sheer amount of equipment needed alone is staggering, not to mention that such equipment is usually made from steel and aluminum and is often foreign made.
And this is presuming that the owners want to build the factory as fast as possible. There’s quite a few from Biden’s incentives that are still not anywhere near ready to start producing anything. And that’s presuming that anybody has confidence that the economic environment will stay stable enough to make such a multi-decade investment worthwhile and won’t be reversed because of unexpected tariffs.
The thing is that you invest and build things like factories with a long-term time horizon. One of the things that makes stable western democracies rich is that we have stable governments and a rule of law that makes planning these large, long-term investments easier. With Trump, you have no idea what is happening next month, never mind next decade. And you can assume that most of this crazy stuff will be repealed in 4 years max. So, it is not worth building most of the factories you would need if this were going to be the policy for decades.
As you say, the supply chain is unlikely to shift that much. What will happen are changes in demand. It will hurt both sides.
There is a reason that The Depression was global. You cannot tariff your way to prosperity.
Would be a shame if Canada had to up the price to make up for the slump in sales. It costs a lot of money to run a smelter and lower production increases the overhead per ton of product.
We could stack export tariffs on there. Bureaucratically difficult since we currently don’t really do export tariffs. But it would be an interesting political response.
If cutting power is still on the table, sometime in the next 2 hours would be hilarious.
Aluminum uses a lot of electricity to manufacture too.
Sure would be a shame if it suddenly became uneconomical to manufacture in the US.
We export electricity, natural gas, and crude oil. https://www.ctvnews.ca/montreal/article/can-quebec-cut-energy-exports-to-the-us-amid-tariff-war-an-expert-says-we-shouldnt/
It’s already practically uneconomical to so, Canada produces about 4x more Aluminium than the US and the US imports about 80% of the Canadian production.
Canada doesn’t have to budge on this one, the US can’t just spin up that much Aluminium production in any reasonable time line, they’re going to keep importing it and just paying the tariff themselves.
Not just aluminum, but building factories for anything takes years nowadays. The sheer amount of equipment needed alone is staggering, not to mention that such equipment is usually made from steel and aluminum and is often foreign made.
And this is presuming that the owners want to build the factory as fast as possible. There’s quite a few from Biden’s incentives that are still not anywhere near ready to start producing anything. And that’s presuming that anybody has confidence that the economic environment will stay stable enough to make such a multi-decade investment worthwhile and won’t be reversed because of unexpected tariffs.
The thing is that you invest and build things like factories with a long-term time horizon. One of the things that makes stable western democracies rich is that we have stable governments and a rule of law that makes planning these large, long-term investments easier. With Trump, you have no idea what is happening next month, never mind next decade. And you can assume that most of this crazy stuff will be repealed in 4 years max. So, it is not worth building most of the factories you would need if this were going to be the policy for decades.
As you say, the supply chain is unlikely to shift that much. What will happen are changes in demand. It will hurt both sides.
There is a reason that The Depression was global. You cannot tariff your way to prosperity.
Would be a shame if Canada had to up the price to make up for the slump in sales. It costs a lot of money to run a smelter and lower production increases the overhead per ton of product.
We could stack export tariffs on there. Bureaucratically difficult since we currently don’t really do export tariffs. But it would be an interesting political response.