The steel and aluminum tariffs imposed by the United States on imports from Canada and Mexico have long been a flashpoint in North American trade relations.
While these measures are often framed as tools to protect domestic industry, the reality is more complex—and the costs are often borne by those least equipped to absorb them.
The White House has cited global excess capacity, foreign subsidies, and unfair trade practices as the primary drivers behind the tariff hike.
According to the proclamation, while earlier tariffs provided some price support, they failed to sustain the targeted 80 percent capacity utilization in domestic steel and aluminum production (per www.whitehouse.gov/presidential-actions/2025/06/adjusting-imports-of-aluminum-and-steel-into-the-united-states/).
In fact, aluminum utilization dropped from 61 percent in 2019 to 55 percent in 2023, and steel hovered below the desired threshold, according to the White House.
The US administration argues that foreign producers—particularly in countries like China—continue to flood the US market with low-cost metals, often processed or transshipped through Canada and Mexico.
Imports from these two countries rose from 7.77 million metric tons in 2020 to 9.14 million metric tons in 2024, with reinforcing bar imports surging 1,678 percent from Mexico and 564 percent from Canada.
And yet, once upon a time, the United States did not impose broad tariffs specifically targeting Canadian and Mexican steel and aluminum products in the way it has done during the current Trump administration. However, there were historical trade disputes and sector-specific duties that shaped the trade landscape between the countries.
The Canada-U.S. Free Trade Agreement (CUSFTA) in 1989 and NAFTA in 1994 significantly reduced tariffs on most goods, including steel and aluminum, between the US, Canada, and Mexico. Both of these agreements created one of the largest free trade zones globally, and for decades, steel and aluminum flowed relatively freely across borders.
While broad tariffs were absent, disputes over specific industries—softwood lumber, agriculture, and automotive parts—were common. Steel and aluminum were occasionally involved in anti-dumping investigations or countervailing duties, but these were case-specific and not blanket tariffs.
And then there was the Smoot-Hawley Tariff Act of 1930, which imposed high tariffs on many imported goods, including Canadian products, during the Great Depression. Canada retaliated, escalating trade tensions, but the act did not specifically target steel or aluminum.
In March 2018, President Donald Trump invoked Section 232 of the Trade Expansion Act, citing national security concerns, and imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum.
Initially, Canada and Mexico—key US trading partners—were exempt, but by June 1, 2018, those exemptions were lifted, marking the first time in modern trade history that such broad tariffs were applied to Canadian and Mexican steel and aluminum exports. Both Canada and Mexico swiftly retaliated with rising tariffs of their own against US products entering their respective countries.
Canada responded with duties on $16.6 billion worth of US goods, targeting politically sensitive exports like ketchup, orange juice, and steel pipes. The tariffs were lifted in May 2019, but tensions resurfaced in 2020 and again in 2025, when Trump—now in his second term—reinstated and expanded tariffs to 50 percent on aluminum and 25 percent on steel, covering over 400 product categories.
Who Actually Pays These Tariffs?
Contrary to popular belief, tariffs are not paid by foreign governments or exporters.
They are paid by US importers—often manufacturers, distributors, and retailers—who pay the duties (tariffs) when goods enter the country.
These costs are typically passed down the supply chain, ultimately reaching US consumers in the form of higher prices.
For service truck manufacturers and operators, this means increased costs for steel and aluminum components, including brackets, tubing, fasteners, and hydraulic fittings. The White House also confirmed that only the steel and aluminum content of imported products is subject to the increased tariff, while other materials are taxed under separate provisions.
Steel and aluminum are foundational to truck bodies, toolboxes, cranes, and hydraulic systems. When tariffs inflate prices, companies must either absorb the costs, reduce margins, or pass them on to customers.
US steel and aluminum producers are the primary beneficiaries.
Tariffs reduce foreign competition, allowing domestic firms to raise prices and expand market share. However, this protection comes with a cost.
A 2024 report from the Tax Foundation estimated that Section 232 steel and aluminum tariffs led to 75,000 job losses in downstream industries, primarily in the US—those that rely on steel and aluminum as inputs, such as manufacturing, construction, and transportation.
These losses occurred because tariffs raised the cost of imported metals, US manufacturers had to pay more for raw materials, and the higher input costs led to reduced production, lower competitiveness, and ultimately job cuts.
Additionally, the cost of saving each job in the US steel-producing sector was estimated at $650,000, per https://taxfoundation.org/wp-content/uploads/2024/05/How-the-Section-232-Tariffs-on-Steel-and-Aluminum-Harmed-the-Economy-2024.pdf, which they point out highlights the inefficiency of the policy.
Canada and Mexico also experienced economic fallout, such as layoffs in Canadian steel plants and reduced exports.
In Canada, there were over 1,000 direct layoffs in steel and aluminum plants, with broader economic effects leading to 10s of thousands of job losses across manufacturing. Some of the companies affected were Algoma Steel, MPG Canada, and other mid-sized producers.
In response, the federal government of Canada introduced employment insurance access and work-sharing programs to mitigate the impact.
In 2024, bilateral trade in steel and aluminum between Canada and the US totaled $14 billion. The new tariffs disrupted this flow, forcing Canadian firms to find alternative buyers or absorb losses.
As of August 22, 2025, the province of Ontario, the center of Canada's auto industry, had reported that over the past three months, it had lost 38,000 jobs, most of which were in manufacturing.
Despite ongoing negotiations, and Canada agreeing to drop some of its retaliatory tariffs, no progress was made on metals tariffs. The US 50 percent tariff on all steel and aluminum imports, except for those from the UK, remains, as well as copper imports, as does the 25 percent tariff on aluminum imports.
Canada, for its part, has placed a 25 percent tariff on American steel, aluminum, and autos, which will also remain in place.
Mexico had at least 45,000 jobs lost in the border manufacturing sector, with additional losses in steel production and exports (https://latamfdi.com/us-tariffs-on-mexico/).
Mexico’s steel exports to the US dropped by 60 percent following the tariff hike to 50 percent. Overall, the steel industry contributes 1.4 percent to Mexico’s GDP and 8.7 percent to manufacturing output—the tariffs caused a significant blow.
Right now, Mexico and Canada are attempting to negotiate exemptions and are considering countermeasures to protect strategic sectors.
US manufacturers, especially in the automotive and construction sectors, are caught in the middle.
They rely on affordable, high-quality imported metals to remain competitive. With tariffs driving up input costs, many are forced to cut jobs, delay projects, or seek new suppliers.
The White House acknowledged that previous exemptions and quota agreements with countries like Canada, Mexico, and the EU were less effective in curbing harmful import volumes and has therefore opted for a uniform 50 percent tariff to close loopholes and restore fairness.
Retaliation and Repercussions
Canada didn’t sit idle. In March 2025, it imposed $29.8 billion in retaliatory tariffs on US goods, targeting vehicles, food products, and industrial machinery. Provinces like Ontario and Quebec banned US liquor—even removing already purchased goods from store shelves so customers could not purchase them—and reviewed procurement contracts, amplifying the economic pressure.
These countermeasures disrupted supply chains and increased compliance costs. Manufacturers on both sides of the border had to reassess sourcing strategies, pricing models, and delivery timelines. The ripple effects extended to logistics, warehousing, and retail.
With the USMCA coming up for review in 2026, trade tensions are expected to intensify.
The Trump administration has signaled that tariffs will remain a key negotiating tool—not just for economic leverage, but also for addressing non-trade issues like immigration and drug enforcement, as it seems to believe that Canada is a huge route for fentanyl to enter the US, though it does blame Mexican cartels working in Canada for that.
Still, less than one percent of all fentanyl entering the US is estimated to come via Canada.
The August proclamation from the White House allows for future adjustments, including quotas and reciprocal tariffs, especially in light of the US-UK Economic Prosperity Deal. The administration also plans to enforce stricter reporting requirements for steel and aluminum content, with penalties for false declarations (www.whitehouse.gov/presidential-actions/2025/06/adjusting-imports-of-aluminum-and-steel-into-the-united-states/).
As for what concerns the trucking industry, the takeaway is clear: stay informed and agile.
Monitor tariff updates—it changes often—diversify suppliers, and explore domestic sourcing where feasible. Because the political scenario revolving around tariffs remains volatile, business are reluctant to do much cross-border shipping, meaning truck transportation is done. However, with strategic planning, businesses can weather the storm and even find new opportunities.