Heavy Metal, Heavier Tariffs: Canada’s Copper-Coated Wake-Up Call
The tariff shock, distilled
On 11 July 2025, President Trump confirmed that all Canadian goods that do not enjoy a formal USMCA carve-out will face a 35% blanket duty from 1 August. The announcement comes on the heels of his decision to double Section 232 levies on steel and aluminium to 50%; the same rate has now been extended to copper and semi-finished copper products. Ottawa has protested, but Washington has issued no sign of pausing.
Why the blow hurts so much
Metals sit at the heart of Canada’s industrial base. Steel alone employs about 23,000 Canadians directly and supports another 100,000 jobs up- and downstream. Aluminium smelters add almost 10,000 more. Copper is smaller in headcount but large in trade value: CA$9.3 billion of copper and copper-based products left Canadian docks last year, just over half bound for the United States. Even before the new duties, Canada’s dependence on the U.S. had begun to ease. Yet, the U.S. still absorbed 68% of total exports in May 2025, meaning every percentage-point tariff swing lands disproportionately on Canadian balance sheets.
Copper futures duly leapt more than 10% on the news, and spot steel prices are beginning to factor in the 50% duty premium. Margins in wire-harnessing, automotive castings, and fabrication are evaporating in real time.
London calling, and why the UK suddenly matters
One immediate release valve is Britain. The United Kingdom still pays only 25% on steel and aluminium under Section 232 and is not touched by the new copper duty. Just three weeks ago, Ottawa and London set up a UK-Canada Economic and Trade Working Group charged with finding “critical minerals and advanced manufacturing projects for joint investment.” Using UK mills or distributors as a finishing step could therefore cut the tariff burden in half while tapping fresh financing channels.
Beyond Britain, rewiring export routes
Europe is an obvious next stop. Under CETA, most Canadian metal products already enter the EU tariff-free; moving semi-finished slab or billet to an EU plant for final processing could restore duty-free status before the goods loop back to North America or on to Asia. When the UK’s ratification of the CPTPP is complete, Canada will gain zero-tariff access to an 11-nation Pacific bloc through a UK gateway, handy for copper foil bound for Korean or Japanese battery plants.
Investing at home to outgrow the duty
Tariffs penalise bulk commodity exports far more than value-added products. That reality has already steered federal funding: Ottawa’s Strategic Innovation Fund (SIF) and its Net-Zero Accelerator stream are pumping billions into electric-arc furnaces, inert-anode aluminium cells, and hydrogen-DRI pilot lines. The arithmetic is simple: transform raw metal into high-grade coil, sheet, or battery-ready copper foil, and the in-tariff cost becomes a much smaller share of the finished price.
Financing and risk-management tools
Canadian firms can also blunt volatility by hedging on the LME and by tapping UK Export Finance (UKEF), which has quietly opened its book to critical-mineral and battery-supply-chain projects. Combining low-interest ECA loans with Ottawa’s SIF grants can shrink the cost of relocating a finishing line to Britain, or even funding a toll-processing JV there, while the LME locks in input margins during the transition
The road ahead
Taken together, the 50% metal tariffs and 35% blanket levy look existential, yet they also supply the political cover, and urgency, for moves Canada has long contemplated: spreading risk beyond one dominant buyer, climbing the value chain, and deepening UK ties that already rest on common capital-market and legal frameworks. Companies that pivot quickly, by booking UK capacity, securing SIF or UKEF funds, and hard-wiring hedges, can turn today’s shock into a springboard for a more diversified, resilient business model.
How Abingdon Group can help
Abingdon Group specializes in cross-border strategy, capital-markets advisory, and government-relations support for Canadian and UK companies navigating today’s tariff turbulence. With teams in Toronto and London, we can quantify your exact exposure through detailed pass-through modelling, craft restructuring roadmaps, whether that means toll-processing joint ventures in the UK or alternative routing plans, unlock financing via UK Export Finance, Canada’s Strategic Innovation Fund, and trusted private-credit partners, and steer you through policy corridors in Ottawa, Westminster, and Washington to pursue Section 232 exclusions or reciprocal relief. If your business needs a clear, data-driven plan to safeguard margins and seize new opportunities before the 1 August deadline, connect with Abingdon today and turn this tariff shock into a strategic advantage.