US-based aluminium company Alcoa has halted growth projects in Canada citing the impact of US tariffs, reported Bloomberg.

The negotiation deadline for a new economic and security deal between the countries is 1 August.

Alcoa is contemplating requesting aid from the Canadian Government to sustain its aluminium operations in Quebec.

CEO Bill Oplinger said in an interview: "The profitability of Quebec is severely impacted. 

“The longer this goes, the more damage it will do to the competitiveness of the Quebec assets – and the Canadian Government understands that.”

The tariffs, aimed at bolstering US manufacturing, are paradoxically undermining Alcoa, a significant US aluminium producer with substantial Canadian operations.

Despite the company’s robust domestic production, Alcoa relies on its three smelting and casting facilities in Quebec to meet US demand.

However, the tariffs have forced the company to redirect shipments intended for the US to other markets.

"We are doing everything we possibly can to ship tons that are normally destined for the US to other parts of the world," added Oplinger.

Following an earnings report that showed an additional $115m in tariff-related costs for the second quarter, Alcoa is considering lobbying for support from both the Canadian federal and Quebec governments.

The trade turbulence has affected numerous metal producers since the US import tariffs on steel and aluminium were increased, with Rio Tinto also reporting significant tariff-induced costs.

Alcoa's executives are now scrutinising capital investments in Quebec, with growth projects on hold pending tariff resolution.

The company is also preparing for potential tariff costs from Brazil, where it sources alumina, by considering alternative supply options.

Navigate the shifting tariff landscape with real-time data and market-leading analysis. Request a free demo for GlobalData’s Strategic Intelligence.