One of the most pressing domestic concerns with U.S. tariff policy has been its impact on the steel, aluminum and automotive sectors. While the auto industry enjoys broad protection under the Canada-U.S.-Mexico Agreement (CUSMA), parts manufacturing remains vulnerable due to the sourcing of materials. In April, parts manufacturers received some relief when it was announced that auto components eligible for preferential treatment under CUSMA would be subject to a zero-per-cent tariff.
Even so, challenges persist. Both GM and Stellantis have shifted production from Canada to the U.S., prompting the federal government to slash import quotas for the two automakers. When announcing the changes on October 24, Ottawa pointed to GM’s scale-back at its Oshawa and Ingersoll plants and Stellantis’ cancellation of plans for its Brampton facility. Finance Minister François‑Philippe Champagne and Industry Minister Mélanie Joly said the companies’ actions violate their contractual obligations under Canada’s auto tariff remission framework, introduced in April 2025.
That framework permits automakers to import a limited number of U.S.-made vehicles tariff-free, provided they maintain agreed-upon production levels in Canada. With GM and Stellantis failing to meet those commitments, Ottawa is reducing GM’s quota by 24.2 per cent and Stellantis’ by 50 per cent.
What has received less attention is the executive order signed October 17, which could reduce tariffs on metals used in the auto sector from 50 to 25 per cent. These metals must be produced in Canada and Mexico and comply with CUSMA.
Stelco and ArcelorMittal supply several specialty steels to the auto industry. Stelco has focused on selling only to Canadian buyers to avoid tariffs, while ArcelorMittal offers high value-added products that are difficult to replace. Part of its strategy has been to share tariff costs with customers.
These tariff changes are expected to boost sales to domestic parts suppliers and improve profitability in serving both Canadian and U.S.-based auto plants. What remains to be seen is whether Cleveland-Cliffs, Stelco’s parent company, resumes steel exports to U.S. automakers. The company acquired Stelco as a low-cost operation, purchasing the plant well below replacement value.
Quebec’s aluminum industry is expected to see a similar adjustment. The only major layoff reported in the sector has been the shutdown of the Alubar plant in Bécancour. Alubar produces aluminum rods from molten metal supplied by the neighbouring ABI smelter, accounting for about 30 per cent of the smelter’s output. The Bécancour facility’s products are exported almost entirely to the U.S. market. Currently, Alubar’s Missouri plant is serving the U.S. market, though it remains unclear how much of that output is directed to the auto sector.
The tariff change could bring greater stability to the auto parts industry by reducing input costs and improving profit margins at Hamilton’s two steel plants. Stronger profitability, in turn, should support employment stability — an outcome that would also benefit the housing and mortgage markets.
These measures point to a modest but meaningful shift in Canada’s trade environment. The months ahead will reveal whether these adjustments deliver lasting relief or simply mark another chapter in the ongoing trade war.
Housing Affordability Watch
CMI monitors the latest developments and offers insights on solutions to Canada’s housing affordability crisis
Is 50 the new 30?
The U.S. is weighing a 50‑year mortgage, but critics say the benefits are limited: compared with a 30-year loan, borrowers would pay twice the interest while building little equity in the first 20 years.
From Japan’s 100‑year experiment to Switzerland’s hybrid model, history shows ultra‑long mortgages don’t always deliver affordability.
Read our analysis in the latest Housing Affordability Watch: Is 50 the new 30? Examining the U.S. Proposal for 50-Year Mortgages
Independent Opinion
The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any person or organization in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice including investment advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication. Readers are cautioned to always seek independent professional advice from a qualified professional before making any investment decisions.
