Macro Bites – US-Canada Trade Talks Target Steel and Auto Tariffs

Reuters cites U.S. and Canadian ‌sources in reporting the U.S. ​and Canada are working on a deal to ease U.S. tariffs on Canadian steel and autos as the two governments try to repair relations that soured after trade talks broke down in August.  The talks focus on tariffs imposed under Section 232 of US trade law, including up to 50% tariff on Canadian steel and a 25% tariff on autos, with negotiators discussing potential relief from those duties.  One Canadian source briefed on ⁠the negotiations said a deal on steel and auto tariffs was possible before Nov. 3 elections, while U.S. sources said the Trump administration is still seeking further Canadian concessions.

The Australian federal government in Canberra has conditionally approved A$180 million in taxpayer-backed project finance debt to fund Phase 1 construction of Aston Corp.’s Donald Rare Earth Project in Victoria.  Announced jointly by federal ministers on Tuesday, this funding package is part of Australia’s bilateral framework with the U.S. to secure "mine-to-magnet" Western supply chains and reduce reliance on traditional processing dominant networks.  Financing commitments include A$110M in senior debt financing from Canada’s National Reconstruction Fund Corp. and A$70M from Export Finance Australia’s commercial account, with commercial lenders expected to provide the remaining balance up to A$200M in term financing.

On Monday, Canadian miner Capstone Copper announced a $3B investment plan in Chile’s Atacama region, which includes $2.3B to the Santo Domingo project and $220M to short-term projects at Mantoverde.  The investments are expected to double Capstone's Chilean copper production by ‘31 (peaking at over 8,000 construction workers).

Nornickel (world’s largest palladium producer and major refined nickel producer) said on Monday it will begin a nine-month overhaul next year of a key flash-smelting unit in the nickel production chain at its Nadezhda Plant.  While Nornickel confirmed its ‘26 production forecast of 193kt to 203kt of nickel, 2.415Moz to 2.465Moz of palladium, and 336kt to 356kt of copper, it expects the overhaul to reduce output of its key metals in ‘27 and into ‘28.

Teck Resources reports that 1,200 workers (United Steel Workers Local 7619) at its Highland Valley copper mine in British Columbia began a strike on Saturday.  Teck said operations are continuing at a reduced capacity, but the effect on production will depend on the duration of the job action.  The union said last week that the company’s proposal continued to fall short of members’ expectations, while other concession demands remained on the table.

Anthropic filed its S-1 registration statement for an IPO projected to raise a record $100B (vs. SpaceX $75B).  SpaceX said an affiliate of Apollo Asset Management will buy AI chips and server hardware to lease them to SpaceX in a deal worth $40B. Meta said it increased its largest-ever equity fundraising to $97.5B as it aggressively expands its AI infrastructure.  Stay tuned…