Canada and the U.S. have long shared a robust trade partnership—but tariffs introduced by the U.S. in recent months have tested that bond, with direct consequences for Canadian exporters. Courtesy of Chris Robert via Unsplash
Following U.S. President Donald Trump’s imposition of 25 per cent tariffs on steel and aluminum imports from Canada and other trading partners, which came into effect on March 12, the Canadian mining industry has been grappling with supply chain disruptions and rising costs for certain materials. In response to the tariffs, Canada unveiled a list of U.S. goods on March 4 worth $30 billion that would be subject to 25 per cent retaliatory tariffs, which affect mining machinery and parts.
While Canada has not been subject to the Trump administration’s recent 10 per cent universal tariffs, effective April 9, the original 25 per cent tariffs on steel and aluminum remain in place, along with a 25 per cent tariff on goods that do not comply with the Canada-U.S.-Mexico (CUSMA) Agreement.
B.C. suppliers seek tariff relief
Members of the Mine Suppliers Association of British Columbia (MSABC) have been feeling the effects of both U.S. tariffs and Canadian countermeasures, which include rising product costs and delayed purchasing decisions driven by ongoing uncertainty. Alec Morrison, MSABC president and chief executive officer, explained that members are pursuing relief through federal tariff remission processes and exploring alternatives to U.S. sources of inputs and products whenever possible. They are also highlighting the challenges of finding non-U.S. alternatives to products that meet North American safety standards.
With mining machinery and parts included on the list of Canadian countermeasures, Morrison noted that products such as specialized bulldozers, trucks, attachments and parts being used in the B.C. mining industry either do not have equivalent non-U.S. alternatives, or if they do, incorporating those alternatives cannot be done in a way that is economically feasible. To avoid steep cost increases if new tariffs are applied, suppliers and mine operators would need to seek exemptions or tariff remissions for these products.
Morrison highlighted that giant mining tires are one of the products most significantly impacted. “For these specialized and costly tires, U.S. manufacturers’ factories are equipped with unique machinery designed specifically for the needs of B.C. and Canadian mines,” he wrote in an email to CIM Magazine. “Retooling non-U.S. factories to meet Canada’s demand would require substantial investment and could take years to complete. If remissions are not granted for these specialized products, B.C. suppliers and mines will face a steep rise in tire costs.” He added that tires are among the top operating expenses for mining operations.
MSABC is working closely with the Mining Association of BC and other partners to ensure that the concerns of B.C. mining suppliers, contractors and service providers are heard by provincial and federal governments.
Morrison noted that while the Canadian government must respond to U.S. tariffs imposed on Canadian exports to the U.S., that response should be targeted in a way that also supports Canadian businesses.
“We support ongoing efforts to mitigate tariff impacts through important programs such as the Government of Canada’s remission process, duties relief program and duty drawback program,” Morrison wrote. “These programs must be resourced properly to provide timely responses to time-sensitive requests for tariff remission and other support. While these programs are essential, in some circumstances the better approach may be to remove items with limited or no regionally available non-U.S. alternatives from the Canadian tariff countermeasure list altogether.”
Morrison added that MSABC members would also like governments to consider all options to support and promote B.C. and Canadian businesses, such as reducing interprovincial trade barriers, and targeted measures to promote B.C. companies. Morrison cited Australia’s METS Ignited program, which was designed to enhance awareness of, and commercialization within, the Australian mining equipment, technology and services sector, as a potential model to consider.
Impacts on mining equipment supply
In an email to CIM Magazine, Cheryl Gray, vice-president (VP) of mining for Finning Canada, which specializes in Caterpillar products, parts and services, explained that Caterpillar products can only be sourced from the U.S. from highly specialized production facilities. Despite this, the company is confident in its ability to navigate tariff-related challenges and continue supporting its customers.
“Right now, Finning is focused on continuing to understand the impact of these tariffs on our operations and our customers,” Gray wrote. The company was actively involved in the government’s consultation process regarding the proposed countermeasures in response to U.S. tariffs on Canadian goods.
Finning is strongly urging the federal government to exclude heavy equipment and parts essential to the mining industry from the tariff countermeasures and is encouraging its industry partners to take similar action.
Support for Canadian exporters affected by tariffs
Todd Winterhalt, senior VP of international markets at Export Development Canada (EDC), a crown corporation that supports Canadian companies, including mineral exploration and junior and major miners in the global marketplace, said in an interview with CIM Magazine that EDC launched the Trade Impact Program on March 7 to support Canadian exporters and their suppliers currently impacted by market uncertainty.
The program offers a total of $5 billion in financing and insurance solutions, including loans, guarantees, and working capital, over a period of two years. The program seeks to help Canadian businesses manage challenges like supply chain disruptions and currency risks, while also enabling global expansion. The amount of support provided to each company will depend on the specific case, including factors such as product type and individual needs.
Key concerns EDC has been hearing from its clients include payment uncertainty for cross-border shipments and supply chain disruptions. Winterhalt explained that, out of clients in its exporter base, raw material producers with existing contracts in the U.S. have faced issues where their exports were recently repudiated at the U.S.-Canada border and not received by customers.
Winterhalt noted that the size of a company greatly influences how it responds to tariffs. “Some of our larger customers are saying, I can probably tough this out for four or six, maybe even eight months, absorb some of the impact, and hope that things get a little bit more stable,” said Winterhalt. “Obviously, on the smaller end, it’s a lot harder. That’s measured sometimes in weeks, sometimes even in days, in terms of how much runway some of those smaller companies have with the uncertainty.”