Metals sector faces aggressive Trump ahead of high-stakes USMCA trade talks

Metals Market Movers 2026: Metals markets are increasingly being shaped by policy as much as by fundamentals. This is the second of our 6-part series that explores how climate regulation, industrial policy, trade policy, and strategic investments are influencing supply, demand and price across steel, iron ore, and critical minerals.

A high-stakes review of the US-Mexico-Canada Agreement scheduled for July 2026 could bring significant economic disruption to the North American economy, including the metals trade.

The mandated review was widely expected to be a straightforward evaluation of the trade agreement when it was signed in 2018. However, trade has been a central priority in economic and foreign policy for US President Donald Trump during his second term, and he could take a hardline approach to discussions. Trump may see negotiations as an opportunity for an expansive renegotiation of trade relations, experts told Platts, part of S&P Global Energy.

Any major changes would reverberate through the global economy and upend trading relations between Canada, the US, and Mexico, which have become closely integrated over the past four decades. The most severe outcome would be a US exit that would suddenly impose double-digit duties on metals and other covered products. Alternatively, Trump might choose to settle or delay any USMCA decision for a year under domestic pressure to avoid risking more inflation, experts said.

"This was supposed to be a routine assessment of the agreement with the potential for the countries to make small adjustments that don't change the core commitments," said Diego Marroquín Bitar, a fellow with the Americas Program at the Center for Strategic and International Studies in Washington, DC. "But what is likely going to happen is something much more ambitious, likely more aggressive."

Integrated economies

In terms of value, Mexico was the top global supplier of goods to the US in 2024, and Canada was second, reflecting the tightly integrated supply chains, according to US Census Bureau data.

USMCA-compliant trade has surged in 2025 as importers and exporters scrambled to leverage the trade agreement to avoid country-specific reciprocal tariffs, according to an S&P Global Market Intelligence data analysis.

In the three months through Aug. 31, 75.8% of US imports from Mexico and 78.2% from Canada were USMCA-compliant, the data showed. For the same three-month period of 2024, 36.8% of Canadian goods were USMCA-compliant, and 47.9% of Mexican products were compliant.

Metals trade between the three countries is especially close-knit. Canada supplied 70% of US imports of primary aluminum in 2024, according to Market Intelligence data.

Tough talk

Trump has far more leverage going into the USMCA talks than either Canada or Mexico, due to the relative size of their economies, trade experts told Platts.

"During these negotiations, the Trump Administration is going to take a very hard line," said John Boscariol, partner and co-head of the international trade and investment law practice at the Canada-based McCarthy Tétrault firm.

Metals are one sector where Canada and Mexico -- key metal markets for the US -- may hold some leverage, and companies and trade groups would like to see talks rein in Trump's 50% sectoral duties on aluminum, copper, and steel.

"There are some areas of cooperation where it would really be important for the US to get along with Canada, Mexico -- mostly rare earth minerals [and other metals] and maybe artificial intelligence," said David Gantz, the Will Clayton Fellow in Trade and International Economics at Rice University's Baker Institute for Public Policy in Texas.

Aluminum producers in both the US and Canada have been advocating for an easing of the 50% sectoral tariff, but trade experts told Platts they were skeptical the sectoral metals tariffs under Section 232 of the Trade Expansion Act of 1962 would be eliminated. They saw room for preferential rates to make manufactured products in the US, as well as Canada and Mexico, more competitive in the global economy.

Multiple sources also told Platts they saw the USMCA talks as a chance for the trade partners to strengthen cooperation in critical minerals through a new chapter on metals or other means. The US could seek mineral supply guarantees, while Canada and Mexico chase lower tariffs on metals and other products, and more integration in mineral supply chains.

"The idea of having guaranteed supply -- no cut off -- is a very interesting one," Gantz said, pointing to past provisions in trade agreements constraining Canada's ability to lower exports of some petroleum products.

However, at least one of the three nations is not enthused about new sections.

"We are not looking to renegotiate it or add chapters, unless absolutely necessary," Marcelo Ebrard, Mexico's economy minister, said in a Nov. 3 speech as part of USMCA consultations in Mexico City.

The Canadian Prime Minister's Office did not respond to a request for comment. The White House acknowledged questions but did not respond.

Rules of origin

US trade groups said a revised USMCA should tighten rules of origin, protecting North America as a whole against what they see as unfairly priced imports.

"Within the USMCA framework, the rules of origin and enforcement mechanisms for USMCA must be updated to address this non-market-based economic activity," the Aluminum Association said in an emailed statement.

Likewise, the American Iron and Steel Institute said that Canada and Mexico must align their tariffs with US duties and that the USMCA should have stronger melt and pour rules for steel and aluminum.

"Such action by Mexico and Canada to mirror the US Section 232 steel tariffs will create, in effect, a common external tariff for all three North American countries on all steel products imports from outside North America," the trade group said in an email.

One trade expert said tougher rules could be hard to swallow for Canadian and Mexican manufacturers.

"In fact, that could get so complex as to be a trade barrier itself," said Boscariol, with the McCarthy Tétrault law firm. Boscariol pointed to the difficulty for some USCMA exporters to puzzle together the complex metals supply chains for certain products.

Looming outcomes

Trump could seek to withdraw the US from USMCA.

"That is a real possibility," Drew Fagan, professor at the University of Toronto's Munk School of Global Affairs and Public Policy, said of the US withdrawing from the agreement.

If that happened, Canadian and Mexican exports to the US would suddenly lose USMCA compliance. That compliance has protected a lot of North American trade from punishing reciprocal tariffs issued under the International Emergency Economic Powers Act (IEEPA), a 1970s trade law that allows a president to impose duties during a declared national emergency.

But Trump may face pressure to leave USMCA in place. Trump's approval rating sank to 39%, according to a Dec. 17 CNN poll, and Republicans may face a backlash to his policies in the 2026 Congressional elections.

"I would guess the US is not going to withdraw, and I would guess that the parties will agree to kick things over until 2027," Gantz said.

Supreme wrinkle

The US Supreme Court could scramble USMCA talks if it scraps Trump's country-specific tariffs. If the court strikes down the tariffs, which it could do before June, Trump would lose one of his hammers in trade talks.

But experts said even then it would have a limited impact on USMCA negotiations, given that USMCA products avoid reciprocal tariffs by using the IEEPA as justification.

If the Supreme Court rules against Trump, the president could ratchet up the use of other mechanisms to impose tariffs through Section 232 and other laws, experts said.

"I think the average 2.5%, 3% most-favored-nation tariff for the US is never coming back," Gantz said. "I think the new base is probably more like 10%, with a few exceptions like the USMCA."

Platts reporters Fernanda Pintle and Rachel Looker contributed to this article.

Read the first story in the Metals Market Movers 2026 series here.