Mining at risk: How tariffs could trigger an industry slowdown

Beyond the immediate financial impact, tariffs are guaranteed to create economic uncertainty that discourages investment in the mining sector. Higher trade barriers often lead to market volatility, making it harder for companies to plan long term projects or secure financing. Needless to say, the current Canadian regulatory and permitting process is already a tough nut to crack. Investors may hesitate to fund new mining developments if they anticipate reduced profitability owing to restricted trade. This uncertainty could also impact related industries, such as transportation and equipment manufacturing, which depend on a thriving mining sector.

If prolonged, these effects could contribute to a broader economic downturn, slowing job creation, and weakening Canada’s position as a global mining leader. Additionally, tariffs could trigger a slowdown in Canada’s mining industry by increasing costs and disrupting supply chains. Higher tariffs would drive up production costs for mining operations. This could make Canadian mines less competitive on the global market, forcing companies to scale back operations, delay new projects, or even reduce their workforce. On top of that, if countries impose retaliatory tariffs on Canadian minerals and metals, demand for these exports could decline, leading to revenue losses across the industry.

To combat the impact of tariffs, the mining industry in Canada must minimize costs, diversify markets, and strengthen resilience. For example, supply chain optimization, market diversification, and investing in domestic manufacturing or partnerships with local suppliers can also reduce reliance on costly imports.

Furthermore, mining firms can explore technological advancements, such as automation and energy-efficient equipment, to improve operational efficiency and off set rising costs. This reflects directly on the main feature of this issue, which is battery electric vehicles (BEVs), as switching to BEVs could help mining companies save money and reduce CO₂ emissions.

Clearly, assuming leadership across the BEV supply chain (including passenger BEVs) represents an enormous economic opportunity for Canada, creating good manufacturing jobs across the country. According to recent reports, experts are starting to agree that the federal government should ease or lift its 100% tariff, slapped on Chinese electric vehicles (EVs) last fall, to spur EV purchases and deliver a blow to Elon Musk’s Tesla, as part of Canada’s trade war with the U.S.

Moreover, rather than relying on a few major trading partners, Canadian miners can expand their export destinations to regions with favorable trade agreements. Strengthening relationships with emerging markets could help maintain demand for Canadian minerals and metals. Engaging with policymakers and industry associations to advocate for fair trade policies, exemptions, or tariff relief programs can also provide relief and create new revenue streams and reduce exposure to tariff-related fluctuations.