Local steel and aluminum businesses react to Trump's 50% tariffs

Additional tariffs on steel and aluminum crossing the border into the United States will mean more struggles for local businesses already dealing with a sluggish economy and consumers worried about spending money as uncertainty looms.

On Wednesday, tariffs on steel and aluminum imports to the United States doubled to 50 per cent after U.S. President Donald Trump signed an executive order.

"I think the biggest thing happening locally is the consumer confidence dropping as a result of the uncertainty," said Ian Low, the owner of Aluminum Associates, a London business for 62 years specializing in housing exteriors.

Trump's move is deepening fear in Ontario, a steel-production hub, and Quebec, a major global aluminum producer.

"I think it's terrible what's happening. The Trump administration has no idea the collateral damage that's happening in the industry. They're so focused on their steel mills, and they have no idea what's happening with inflation with food and other areas that require steel. It's terrible," said John Iacobelli, the owner of Sun-Brite Foods which cans food for Unico and Primo products based in Ruthven, near Windsor.

Sun-Brite buys 30 per cent of its cans from the United States and are working toward replacing them with Ontario-made cans within two years, Iacobelli said. "The problem is, we have Canadian steel corporations lobbying our government to slap a tariff on steel coming from the European companies, and all that's going to do is raise the price again."

Many of the region's steel and aluminum companies, which supply everything from roofs and windows to soffits, sheets and pipes, say they source their metal from Canadian producers and have a local customer base, so their bottom lines won't be affected directly by the tariffs.

"Our industry overall is tightly integrated with the United States, as well as offshore product coming in as well," Low said.

"Canada's market is just too small to stand on its own and the vast majority of what is used in the building industry is not from within Canada itself but either U.S. or offshore," he said, adding that many companies have started shipping from other parts of the globe.

Companies have just finished negotiating prices with customers suppliers with the 25 per cent tariff, only to be facing a doubling now, Iacobelli said. "I can tell you, my supplier of cans has been very good and we have a good relationship with them, and they're trying to minimize the impact as much as possible."

Costs in general are being driven up because companies are having to find new suppliers, Low added.

Diane Perkins has found the same thing. She and her husband own McCalllum Aluminum, which started in 1957. The couple purchased it in 1992.

"We're just always holding our breath because you don't know from one day to the next what prices will be," Perkins said. "People have come in and told us they've been putting off getting their soffits done and they got a quote from us previously, and now the amount is four times what it was several years ago."

Many businesses are still paying off government loans handed out during COVID, and are now facing higher prices and fewer customers, she added. "I can't see retirement coming any time soon now," Perkins said.

Like other companies, Bakker Aluminum has been trying to find local suppliers as much as possible recently, said company president Brad Fournie.

"Our sunrooms come out of the U.S. and they're going to increase in price by another 25 per cent. I'm not going to sell any of them, that's for sure," Fournie said. "But we have some Canadian-made ones that I am going to be gearing people toward."

People's first question is about price and how the tariffs will impact it, he added. "I have to explain to them that the majority of what we do is made right here in Canada."

Recently, Fournie found a local patio cover manufacturer that he has started to do business with, instead of the company he used to work with from Philadelphia.

"We need to make things economically friendly for our consumers," he said.

Even companies at the very end of the supply chain are impacted. Zubick's scrap yard will be hit with fewer customers, thought that won't happen until a month or so from now, said Ben Zubick.

"As scrap is not directly tariffed, we will not feel the full impact until automotive and similar manufacturers order fewer tons of new steel from local mills. This in turn will reduce the mills' scrap buying price in buying tons," Zubick said.

"Additionally, these manufacturers will be using less steel which means we will be recycling less metal from them."