Hugh Mackenzie is on break this week.
Trump is in panic mode ahead of the US mid-term elections in November 2026. That is why the “stable genius,” as he once called himself, is bent on imposing tariffs on products of other countries selling to the USA, such as the threatened 35% tariff on aluminum, steel, and now copper from Canada.
Aluminum is important in manufacturing aircraft, cars and trucks, and defence products. The US doesn’t want to be dependent on aluminum from China or Russia, but Trump thinks he can use tariffs on Canadian aluminum to extort protection money from Canada. Nope!
Let’s look at the example of aluminum. Aluminum is one of the most energy-intensive materials to make. It takes 14 billion kWh of electrical energy to make one million tonnes of primary aluminum per year. That’s about the same as powering one million Canadian households (5% of that to make recycled aluminum). Canada’s production of aluminum per capita is 9 times that of China, 7 times that of the USA, and 1.5 times that of Russia. Canada uses clean and renewable hydro power in the smelting process, China uses coal, and Russia uses gas. The USA uses a mix of hydro and gas.
On a trip to the East Coast in 2003, we drove along the north shore of the St. Lawrence, east of Montreal, to Shawinigan (the home of Jean Chretien) and then went north to Chicoutimi, where we saw the enormous aluminum smelters powered by clean hydro from the outflow of Lac-St-Jean into the upper Saguenay River. Then we drove back along the north shore of the Saguenay to the picturesque village of Tadoussac, one of two original settlements in “New France.” We took a boat cruise up the lower part of the Saguenay, where the ore boats from South America bring bauxite ore up the wide and deep Saguenay fjord to Chicoutimi.
That combination of geography is unmatched in the US and indeed in the world. It gives Canada an unmatched advantage in the production of primary aluminum. The US doesn’t want to be dependent on China and Russia for its aluminum supply. If they treat Canada and other countries fairly and respectfully, like most previous US administrations have done, they could continue to have access to the world’s best facilities for producing aluminum and other critical materials. But that’s not the Trump way.
Even if the US could replicate Canada’s aluminum production facilities at Chicoutimi, which it can not, it would take 7 to 10 years to engineer and build. Trump’s pipedream of using tariffs to force aluminum, steel, auto manufacturing, etc., to leave their carefully established current locations and scramble to the US, where production costs are the highest in the world, is just that, a pipedream.
All of Trump’s ideas are very short-sighted, designed to feed his boundless ego and enrich his supporters. According to a recent report from McKinsey & Company, global demand for aluminum, driven by the clean energy transition that Trump hates because it limits his profits, is expected to outstrip supply by 4 million tonnes by 2035. That means if Boeing or Ford or General Dynamics needs more aluminum and Canada’s supply line has been damaged by Trump’s tariffs, the choices left are to get it from China, Russia, or the UAE. How does that help with North American security?
That example is just for one industry. But Trump and his greedy ilk in the Republican Party want it all. They want all the business and all the highest per capita incomes. And they couldn’t care less what that does to anyone else, or to the world. He has no real friends. He is putting impossible tariffs on already very weak countries like Laos, Myanmar, and Syria.
The US courts are challenging the legality of Trump’s unilaterally declared tariffs. But even if they are legal, US companies might gain some market share in the US but lose market share everywhere else they sell. And US companies will lose overall efficiency by having to produce every variation of their product in every export market. Currently, they produce each variation where it makes sense and share the rest. E.g., GM makes pickup trucks in Canada because they have a large market share, and they import all other low market share models. That is good for overall tooling, sourcing, and manufacturing efficiency. That’s why the auto trade agreement was struck in 1965.
Trump is in panic mode to get this done before he loses much of his power in the 2026 midterms, if not before. And he has the unabashed nerve of a canal horse. But there is no need for Canada to be in panic mode to comply with his bold-faced blackmail. We could have some short-term pain, but we must stay on course with our own and global interests.
Hugh Holland
Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.
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Good work Mr. Holland, thank you.
Trumps delusional behaviour plus cognitive decline plus panic are on full display each and every day.
Stay the course. Help out those Canadian industries and Buy Canadian.
Hugh. A well written and logical presentation of a very difficult trading situation created by the idiosyncrasy of the current occupant of the White House. Ultimately his base will realize they are the ones paying the tariffs, not the overseas suppliers.
The really menacing Trump rationale is that America is under threat, and his tariffs etc are protecting them. How far will he go as he says Canadians are “Nasty” for not supporting his policies? His agreement with the UK is conditional on importing large amounts of US source LNG and may limit Canada’s plan to ship our LNG to Europe. I doubt that we can reach an amicable agreement with the Trump administration. We have been shielded from European war by our distance, but the Americans are right next door.
While I always enjoy your contributions, you often scare the be-Jesus out of me, Hugh.
But I’m feeling more hopeful as I read your suggestion that Canada stay the course and refuse to bow down to the willfully ignorant, anti-intellectual, grifter-in-chief that is DJT.
I think that Mr. Carney and his advisors are positioning Canada very well to ride this out while strengthening our other relationships both country-wide and world-wide.
Thanks Hugh.
Hugh, has the PM not been in touch with you to get some advice ? I think Carney is the right guy for the job but more MP’s with your knowledge could help.
Hugh has this dead right! Canada should not fall over itself to try to appease the deranged Trump administration. The US policy will simply not work in the long run and will ultimately increase costs to US citizens greatly while not really achieving much in the way of a more reliable source of supply.
Trump has done Canada a big favor in that he has caused us to take a serious look at “other” trading partners, and there are lots of them. Most are more “reliable” than the USA today to deal with. Generally Trump’s illogical, mostly non-workable policies that turn on and off with each passing day are not something we should be trying to work with. We need to just let the USA wait and deal with other countries and all the time work to improve our own Canadian infrastructure and shared economy so that all the Provinces gain more benefits by virtue of being Canadian. Eventually the US foolishness will collapse and self destruct as the unworkable item it is and maybe then we can work with whomever is in charge in the US at that time.
Take your holiday somewhere other than the USA and just wait a few years.
As always Hugh, well researched, clearly written and today positive for Canada. Thanks.
Ron B Huntsville