Miners Plead For Collaboration As Trade Wars Threaten Critical Mineral Supply Chains

President Donald Trump's tariffs have sparked a backlash within the mining sector, given the deeply intertwined trade relationship between the U.S. and Canada. The Mining Association of Canada (MAC) warned that these measures could disrupt critical mineral supply chains and harm both economies.

"Canada has long been a dependable partner, providing certainty to U.S. manufacturing and defense industries by serving as a major supplier of minerals and metals," said Pierre Gratton, MAC president and CEO. "The imposition of tariffs on Canadian minerals and metals runs counter to American national security and economic interests."

In 2022, over half of Canada's mineral exports, valued at more than $80 billion, went to the U.S. These exports included critical minerals such as nickel, uranium, and aluminum, essential for U.S. industries, including defense, technology, and renewable energy. The tariffs threaten to strain these supply chains, increase costs for U.S. manufacturers, and push Canada to seek alternative markets.

One of the most significant examples of U.S.-Canada interdependence is the Red Dog Mine in Alaska. This mine, operated by Teck Resources TECK, is the world's largest zinc mine and a notable producer of germanium—a critical mineral used in fiber optics, computer chips, and night-vision equipment. However, before these materials reach U.S. manufacturers, they are refined in Canada, primarily at Teck Resources' smelter in Trail, British Columbia.

"The cross-border nature of that supply chain means that it will be heavily impacted," Gracelin Baskaran, a mining economist at the Center for Strategic and International Studies, said for Alaska Beacon. Nearly 89% of Canada's germanium exports go to the U.S., making it a vital buffer against supply disruptions.

In response to the tariffs, Canada has announced retaliatory measures, including 25% levies on U.S. imports such as beer, wine, and bourbon. Prime Minister Justin Trudeau warned that these tariffs would harm U.S. consumers and industries, stating, "They will impede your access to an affordable supply of vital goods crucial for U.S. security, such as nickel, potash, uranium, steel, and aluminum."

Thus, in a trade war scenario, the zinc and germanium from Red Dog could face double fees: once when exported to Canada for refining and again when the refined products return to the U.S.

"Instead of tariffs, Canada and the U.S. should be focusing on deepening collaboration," Gratton said. He also called on Canadian governments to address domestic challenges, such as regulatory inefficiencies and uncompetitive tax policies, to improve the sector's competitiveness.

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