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Canadian can maker sees tariff dispute as chance for supply chain independence

China

China

China

Canadian can maker sees tariff dispute as chance for supply chain independence

2025-03-07 01:28 Last Updated At:04:17

The ongoing tariff dispute with the United States has exerted pressure on Canada's supply chains, although some in the country's aluminum packaging industry see the trade conflict as a potential catalyst for boosting domestic investment and reducing reliance on imports.

Erick Vachon, the president of Ideal Can, a food can manufacturer based in Quebec, started his first company in 2002, importing cans from overseas. But in 2019, just before the COVID-19 pandemic, he took the step of setting up his own production line. He said he was struck by how food processors had to throw food away following delays in deliveries of aluminum cans.

"When COVID arrived, we have the line ready to process. I remember, the border is very difficult for traveling. You don't receive the can from the USA or another country, you don't have any choice but to put (food) in the garbage," Vachon told China Global Television Network (CGTN).

The trade tensions between the U.S. and Canada have left a question mark over imports of steel and aluminum, including cans. While steel production remains a significant business in Canada, aluminum is particularly prone to U.S. tariffs. Canada is a major global exporter of raw aluminum, but lacks rolling mills capable of producing the sheets used for aluminum cans.

The tariffs have led industries throughout Canada to reevaluate the security of their supply chains. Some experts suggest that more investment in vital infrastructure is required in Canada in order to ensure that businesses are better able to withstand the repercussions of trade disputes.

Ideal Can is now investing in four new production lines to increase its capacity from 400,000 cans a year to one billion.

"The pressure has increased because everybody is afraid about the tariff or instability, or the border is closed. We were supposed to invest on the long process. We buy now. So, for example, now we have three lines, and we buy four more lines. For us, it's the opportunity to grow faster," Vachon said.

The 25-percent tariff on goods imported from Mexico and Canada, with a 10-percent tariff increase specifically for Canadian energy products, which were signed by U.S. President Donald Trump on February 1, officially took effect on Tuesday.

Canadian can maker sees tariff dispute as chance for supply chain independence

Canadian can maker sees tariff dispute as chance for supply chain independence

Soaring oil prices triggered by escalating tensions in the Middle East have heightened U.S. inflation pressures, with analysts warning that households face hundreds of dollars in extra costs if crude climbs further.

Data released on Tuesday by the American Automobile Association (AAA) showed that the national average price of regular gasoline in the United States has risen 18.64 percent compared with Feb. 26. The AAA data also indicated that the national average price of diesel on Tuesday was up 22.85 percent from a week earlier.

Mark Zandi, chief economist at global ratings agency Moody's, warned that U.S. consumers are being threatened by a sharp rise in fuel prices. He said that if international oil prices climb by another 10 U.S. dollars per barrel, annual spending for an average U.S. household would increase by about 450 dollars.

Zandi noted that a surge in oil prices would intensify inflationary pressure in the United States, eroding consumers' purchasing power and weighing on consumption, economic growth, and employment.

Tensions sharply escalated across the Middle East on Feb 28 when the United States and Israel launched large-scale joint airstrikes on Iran. The Iranian side has responded with multiple waves of missile and drone attacks targeting Israel and U.S. assets across the region, hitting many countries in the Gulf.

Escalating Middle East tensions drive up energy prices, squeezing US consumers

Escalating Middle East tensions drive up energy prices, squeezing US consumers

Escalating Middle East tensions drive up energy prices, squeezing US consumers

Escalating Middle East tensions drive up energy prices, squeezing US consumers

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