Canada Considering Financial Aid for Aluminum Producers Amid Prolonged U.S. Tariffs
Canada is exploring the possibility of providing financial support to major aluminum producers such as Rio Tinto (NYSE:RIO) if the United States maintains its steep 50% tariff on aluminum imports, the head of a key industry group said on Saturday.
Jean Simard, CEO of the Aluminium Association of Canada, told Reuters that preliminary discussions are underway as a contingency plan in case Ottawa fails to reach a trade agreement with Washington by the July 21 deadline.
“This is part of a broader conversation where all options are being considered,” Simard stated, though he emphasized that no final decisions have been made.
Canada recently backed off from implementing a digital services tax targeting U.S. tech firms in an effort to keep trade negotiations with President Donald Trump on track. However, tensions remain, with the aluminum tariffs still unresolved.
Simard noted that while major Canadian aluminum companies are not facing immediate liquidity issues, the continuation of a 50% tariff—introduced on June 4—would inevitably affect their financial stability over time. Discussions about cash flow impacts are a natural consequence, he added, given the situation.
Roughly 50% of the aluminum consumed in the U.S. is imported, with the bulk of it sourced from Canada.
Simard’s comments come on the heels of reports Friday in which Industry Minister Mélanie Joly confirmed that the Canadian government is in discussions with Rio Tinto regarding possible financial assistance in light of the punitive U.S. trade measures.
Rio Tinto declined to comment on Saturday. A spokesperson for Minister Joly said Ottawa is “actively engaged” in talks to determine the best ways to support Canada’s aluminum industry amid what they describe as unjustified U.S. tariffs. The broader aim, the spokesperson noted, is to encourage further investment in the domestic sector.
President Trump doubled tariffs on steel and aluminum imports to 50% last month, escalating his trade offensive in an effort to bolster U.S. manufacturing of strategic materials critical to infrastructure and defense.
