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Tariff war is a lose-lose proposition: Canada

  • Market: Agriculture, Crude oil, Metals
  • 15/01/25

Any retaliation by Canada to tariffs imposed by the US would be designed to apply political pressure, the country's energy minister said today in Washington, DC, but a potential tariff war between the two countries is a lose-lose proposition.

"We are not interested in something that escalates," Canada's minister of energy and natural resources Jonathan Wilkinson said in a panel discussion at the Woodrow Wilson Center. But until tariffs are imposed, Canada does not know how it will need to respond. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative.

"The point in the response is to apply political pressure," said Wilkinson, who advocated for stronger trade ties between the two countries byway of energy and critical minerals.

US president-elect Donald Trump plans to impose a 25pc tariff on all imports from both Canada and Mexico when he takes office on 20 January. So far he has not signaled any plans to exempt any goods, including oil and gas. Alberta's premier Danielle Smith and now Wilkinson are promoting the flow of more crude to ensure North America's energy security.

"We can enhance the flow of Canadian crude oil from Alberta," said Wilkinson by boosting capacity on pipelines like Enbridge's 3.1mn b/d Mainline crude export system. "The US cannot be energy dominant without Canadian energy."

The incoming administration would be open to such pipeline expansions, said Heather Reams, president of Washington-based non-profit Citizens for Responsible Energy Solutions. "It's something that the Trump administration and Republican members in Congress would be interested in revisiting to ensure that there is a steady flow of the energy that's needed to fuel our mutual economies," Reams said on the panel.

Enbridge's Mainline moves Canadian crude from Alberta to the US Midcontinent, where Wilkinson expects consumers will be faced with higher gasoline prices — adding as much as 75¢/USG at the pump — should tariffs be imposed.

Americans could also see higher food prices if tariffs are put on potash, a fertilizer mined in Saskatchewan and used by US farmers, she said.

Development of critical minerals like germanium, gallium and others should be pursued further to minimize the US' exposure and dependence on China, according to Wilkinson, echoing comments made by Ontario premier Doug Ford on 13 January in his own appeal to enhancing trade ties with the US.

"We cannot be in a position where China can simply manipulate the market," said Wilkinson, citing that country's dumping of nickel. "We should form a true energy and minerals alliance."


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03/04/25

Funding cuts could delay US river lock renovations

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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News

Mexico, Canada sidestep latest Trump tariffs: Update


03/04/25
News
03/04/25

Mexico, Canada sidestep latest Trump tariffs: Update

Adds Canada reaction Mexico City, 3 April (Argus) — US president Donald Trump's sweeping tariff measures largely spared Mexico and Canada from additional penalties, as the US-Mexico-Canada free trade agreement (USMCA) will continue to exempt most commerce, including Mexico's energy exports. According to Trump's tariff announcement on Wednesday , all foreign imports into the US will be subject to a minimum 10pc tax starting on 5 April, with levels as high as 34pc for China and 20pc for the EU. Mexico and Canada are the US' closest trading partners and have seen tariffs imposed and then postponed several times this year, but remained mostly exempt from Trump's "reciprocal" tariffs. Energy and "certain minerals that are not available in the US" imported from all other countries also will be exempt from the tariffs. Trump also did not reimpose punitive tariffs on energy and other imports from Canada and Mexico. All products covered by the USMCA, which include energy commodities, are exempt as well. Yet steel and aluminum, cars, trucks and auto parts from Mexico and Canada remain subject to separate tariffs. Steel and aluminum imports are subject to 25pc, in effect since 12 March. The 25pc tariff on all imported cars and trucks will go into effect on Thursday, whereas a 25pc tax on auto parts will go into effect on 3 May. Mexico's president Claudia Sheinbaum this morning emphasized the "good relationship" and "mutual respect" between Mexico and the US, which she said was key to Trump's decision to prioritize the USMCA over potential further tariffs on Mexican imports. "So far, we have managed to reach a relatively more privileged position when it comes to these tariffs," Sheinbaum said. "Many of our industries are now exempt from tariffs. We aim to reach a better position regarding steel, aluminum and auto parts exports, too." The Mexican peso strengthened by 1.5pc against the US dollar in the wake of the tariff announcement, to Ps19.96/$1 by late morning on Thursday from Ps20.25/$1 on Wednesday. Mexico has not placed any tariffs on imports from the US, which may have eliminated the need for the US to reciprocate with tariffs. "In contrast to what will apply to 185 global economies, Mexico remains exempt from reciprocal tariffs," Mexico's economy minister Marcelo Ebrard said. Mexico exported 500,000 b/d of crude to the US last year, making the US by far the most important export market for the nation's commodity. Mexico also imports the majority of its motor fuels and LPG from the US. If US won't lead, Canada will: Carney To the north, Canada's prime minister says the US' latest trade actions will "rupture" the global economy. "The global economy is fundamentally different today than it was yesterday," said prime minister Mark Carney on Thursday while announcing retaliatory tariffs on auto imports from the US. Canada is matching the US with 25pc tariffs on all vehicles imported from the US that are not compliant with the USMCA, referred to as CUSMA in Canada. But unlike the US tariffs, which took effect Thursday, Canada's will not include auto parts. Automaker Stellantis has informed Unifor Local 444 that it is shutting down the Windsor Assembly Plant in Ontario for two weeks starting on 7 April, with the primary driver being Trump's tariffs. The closure will affect 3,600 workers. Trump on 2 April unveiled a chart of dozens of countries the US is targeting with new tariffs, but that lengthy list may also represent opportunity for Canada and Mexico, who have already been dealing with US trade action. "The world is waking up today to a reality that Canada has been living with for months," Canadian Chamber of Commerce president Candace Laing said, a reality which Carney views as an opportunity for his country. "Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values," said Carney. "If the United States no longer wants to lead, Canada will." By Cas Biekmann and Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Stellantis idles plants, lays off 900 on US tariffs


03/04/25
News
03/04/25

Stellantis idles plants, lays off 900 on US tariffs

Sao Paulo, 3 April (Argus) — Stellantis is pausing production at two factories in Canada and Mexico and laying off 900 workers at US plants as the company evaluates the effect of US automotive import tariffs. Effective immediately, Stellantis will temporarily pause production at the Windsor Assembly Plant in Canada, resuming production in the week of 21 April, the company said Thursday. In Mexico, the Toluca Assembly Plant will halt production on 7 April through the end of the month. As a result, the company will temporarily lay off 900 workers at five US stamping, casting and transmission plants in Michigan and Indiana that supply assembly plants. The automaker attributed the decision to the "new automotive sector tariffs now going into effect". A 25pc tariff on all cars and trucks imported into the US took effect on Thursday and a 25pc tax on auto parts will go into effect on 3 May. Stellantis is monitoring the tariff situation to assess whether further action is required, North America chief operating officer Antonio Filosa said in an internal email shared with Argus . The moves affect production of Chrysler Pacifica minivans, Jeep's Compass and Wagoneer, and Dodge's new electric muscle car, the Charger Daytona. By Pedro Consoli Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump tariffs some steel inputs, spares others


03/04/25
News
03/04/25

Trump tariffs some steel inputs, spares others

Pittsburgh, 3 April (Argus) — US president Donald Trump imposed a sweeping tariff regime Wednesday that will raise the cost of raw materials for steelmakers that operate electric arc furnaces. Pig iron from Brazil, direct reduced iron from Trinidad, and ferrous scrap from the UK will face 10pc tariffs. Ferrous scrap imports from the EU will face a 20pc levy. The tariffs begin April 5 and will not include shipments already in transit before that date. Two notable exceptions from the announced tariffs are scrap from Mexico and Canada. Canadian and Mexican scrap In February and March, Trump placed 25pc taxes on all imports from Mexico and Canada, before rescinding the tariffs days later in both instances. Many Canadian dealers paused US-bound shipments because of the uncertainty. The shifting trade policy partially caused US ferrous scrap imports from Canada to fall to 188,000 metric tonnes (t) in February, the lowest volume since May 2020 during the height of the pandemic, US customs data shows. Scrap dealers in Canada have begun to breathe a sigh of relief. The paused Canadian scrap shipments to the US will likely restart in April because Trump excluded the country from the latest tranche of tariffs, a Canadian dealer told Argus . Separate 25pc tariffs on Canadian steel, aluminum and automobiles are still in effect, however. The steel tariffs could temper flat-rolled steel mills' appetite for scrap this month because they rely on the US market for steel sales, the dealer noted. Brazilian pig iron and Trinidadian direct reduced iron Some US steel mills pivoted to the pig iron market in February and March because of the tariff uncertainty around Canadian and Mexican scrap. The move contributed to soaring US imports of pig iron in March. The US imported an estimated 535,000t of pig iron from all countries last month, more than double the total from the previous March, according to US vessel manifest data and US customs data. Vessel manifest data shows that the total included about 380,000t of pig iron last month from Brazil, the largest supplier to the US market. That could be the highest volume of Brazilian pig iron imported since January 2024 if the official US customs data confirms the sum. Trump's 10pc tariffs on imports from Brazil, Ukraine and other pig iron producing countries could drive up costs for US steelmakers, especially those with electric arc furnaces (EAF). The 10pc levy will also apply to Nucor's direct reduced iron (DRI) plant in Trinidad. Nucor, the US' largest EAF steelmaker, imports about 125,000t of DRI each month from its Trinidad plant. Nucor did not respond to a request for comment on the Trinidad tariffs. The tariffs on iron metallics announced Wednesday could cause steelmakers to raise their steel selling prices even more. US hot-rolled coil prices have already risen by 22pc since Trump announced the 25pc steel tariffs on 10 February. European and UK scrap EAF steelmakers in the US often look to Europe for prime scrap when US prices surge. That occurred in the first quarter of this year, when average #1 busheling prices rose by 25pc to $470/gross ton (gt) during that time. The US imported about 163,000t of busheling and shredded scrap in bulk cargoes from Europe last month, according to vessel manifest data . Not since June 2022 had the US imported more bulk ferrous scrap from Europe, US customs data showed. The new tariffs on UK and EU-origin scrap could make locally sourced scrap more attractive to US steelmakers. By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Opec+ eight to speed up unwinding cuts from May: Update


03/04/25
News
03/04/25

Opec+ eight to speed up unwinding cuts from May: Update

Adds details throughout Dubai, 3 April (Argus) — A core group of eight Opec+ crude producers, in a surprise move, today agreed to speed up plans to gradually unwind 2.2mn b/d of production cuts by increasing their collective output target for May by 411,000 b/d — three times the rise originally planned. "In view of the continuing healthy market fundamentals and the positive market outlook… the eight participating countries will implement a production adjustment of 411,000 b/d, equivalent to three monthly increments, in May 2025," the group said. Front month Ice Brent futures fell by around $1/bl to $70.50/bl in response to the news, and slipped further to below $70/bl later before recovering slightly. The eight countries ꟷ Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan ꟷ last month decided to proceed with a plan to begin gradually unwinding the 2.2mn b/d of production cuts from April over 18 months. The original plan was to see their combined output target rise by 137,000 b/d on a monthly basis until September 2026. Although it is unclear whether the group will revert back to 137,000 b/d increments after May, this change should, theoretically, mean that the eight will return the last of the 2.2mn b/d in July 2026, rather than September. But the volume of oil that actually returns to the market each month will probably be less than the monthly target increases as all of the eight countries, bar Algeria, have past overproduction which they have committed to compensating for over the months ahead. The group said today that the decision to raise output targets by 411,000 b/d for May, versus 137,000 b/d, would also "provide an opportunity for the participating countries to accelerate their compensation". The seven countries with overproduction to compensate for submitted their updated plans to the Opec secretariat two weeks ago, outlining how they plan to deliver that compensation. It is unclear whether today's decision has rendered those plans moot, but it should allow for at least some of the countries to clear more of that they owe next month. Full implementation of the compensation cuts has become increasingly important for the group as it looks to balance market expectations with internal group dynamics. Frustration has built up among some members of the group towards the likes of Iraq and Kazakhstan which have regularly flouted their quotas. What is most surprising about the move is timing, coming the day after US President Donald Trump announced sweeping new global tariffs on a range of imports. That triggered an immediate sell-off in oil futures and stock markets over fears of deteriorating demand in an escalating trade war. But the tariff announcements did not appear to be at the forefront of Opec+ eight minds, with one delegate expressing scepticism that the Trump administration's tariffs were here to stay. The impact is unlikely to be as severe as many fear, they said. Instead, the decision primarily factored in the pick up in oil demand that typically comes with the start of the summer in the northern hemisphere. "A big part of this 411,000 b/d will go to meet that additional demand," one delegate said. Additionally, the move should also enhance internal group dynamics, given the frustration that had been building among some in the group prior to last month's decision to start the unwinding in April, while at the same time getting the thumbs up from the US president who had already called on Opec and its allies to "bring down the cost of oil," something it could only achieve by raising output. Trump has said that he will be visiting Saudi Arabia sometime in May, when the group of eight countries begins to accelerate the return of those barrels. By Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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