In an urgent response to the looming economic threat posed by president-elect Donald Trump’s proposed tariff regime, Canadian officials have initiated high-level discussions with mining giant Rio Tinto to assess potential liquidity challenges facing the metals sector. Foreign Affairs Minister Mélanie Joly confirmed Wednesday that these strategic conversations represent just one facet of Ottawa’s comprehensive preparation for what could become a significant economic disruption to Canada’s industrial backbone.
“We’re maintaining direct communication with major stakeholders across our resource sectors,” Minister Joly explained during a press briefing in Ottawa. “Rio Tinto’s operations represent thousands of Canadian jobs and billions in economic activity—understanding their liquidity position under potential tariff scenarios is crucial to our economic planning.”
The discussions reflect growing concerns about Trump’s campaign pledge to implement sweeping tariffs of up to 20% on all imports from Canada, with potentially higher rates targeting specific industrial sectors. Economic analysts at the C.D. Howe Institute estimate such measures could reduce Canadian exports by up to $45 billion annually and eliminate more than 150,000 jobs across manufacturing, resource extraction, and related service industries.
Rio Tinto, which operates extensive aluminum smelting operations in Quebec and British Columbia, employing over 10,000 Canadians, faces particular vulnerability. The company’s Canadian operations produce approximately 1.4 million tonnes of aluminum annually, with roughly 84% destined for U.S. markets.
“The imposition of punitive tariffs would fundamentally alter the economics of our North American operations,” noted Jean-Sébastien Jacques, Rio Tinto’s Chief Executive, in a statement released after the discussions. “We’re working closely with Canadian officials to model various scenarios and ensure operational continuity regardless of trade conditions.”
Deputy Prime Minister Chrystia Freeland has indicated that the government is exploring multiple contingency options, including potential liquidity support mechanisms for strategic industries facing severe cash flow disruptions from sudden tariff implementations. These measures could include export credit guarantees, temporary tax relief, and expedited regulatory approvals for market diversification initiatives.
“Canada learned valuable lessons during the previous round of tariffs,” noted Freeland, referencing the steel and aluminum duties imposed during Trump’s first administration. “We’re building on that experience with a more robust, forward-looking approach that anticipates various scenarios.”
Trade experts caution that Canada’s options for direct retaliation may be limited without causing further economic self-harm. During previous tariff disputes, Canada’s countermeasures were carefully calibrated to minimize domestic economic impact while targeting politically sensitive U.S. regions.
“The scale of tariffs being discussed would require a fundamentally different response strategy,” explains Debra Steger, former senior negotiator with Global Affairs Canada and professor at the University of Ottawa. “Canada will need to pursue simultaneous paths: challenging measures through trade agreements, working diplomatic channels, and supporting domestic industries through the transition.”
For communities dependent on metal production and processing, the stakes couldn’t be higher. In regions like Saguenay–Lac-Saint-Jean, where Rio Tinto’s operations represent the economic foundation for dozens of communities, uncertainty is palpable.
“We’ve weathered trade storms before, but nothing of this magnitude,” notes Jean Simard, president of the Aluminium Association of Canada. “The integrated nature of North American supply chains means these tariffs would ultimately harm American manufacturers as well, but that economic reality doesn’t guarantee policy restraint.”
As Ottawa continues preparing for what could become the most significant trade disruption in a generation, the question facing policymakers extends beyond immediate economic defense: How can Canada fundamentally reorient its trade relationships to reduce vulnerability to political shifts in its largest trading partner?
