BC is a huge source of metallurgical coal, which is used to make steel. Trump's tariffs are going to hit the province's coal industry hard.
US President Donald Trump’s announcement of 25 percent tariffs on imported steel will send shockwaves through many industries but one of the hardest hit will be British Columbia’s coal industry. As the largest exporter of metallurgical coal in Canada, B.C. relies heavily on global steel production and these tariffs will reduce demand, destabilize prices and disrupt supply chains.
Unlike thermal coal used to generate electricity, over 95 percent of coal mined in British Columbia is metallurgical coal or coking coal. This coal is used to produce coke, a carbon rich fuel used to remove oxygen from iron ore in blast furnaces. Steel production is a big part of global industrial activity and B.C.’s coal industry exists because of that demand.
According to provincial data coal is B.C.’s most valuable mined commodity, generating billions of dollars in revenue each year. B.C. coal is exported mainly to Asian markets like Japan, China, South Korea and India but the US steel industry has been a customer too. A reduction in US steel production due to tariffs could disrupt global steel trade flows and reduce demand for metallurgical coal from B.C. miners.
Trump’s latest 25 percent tariffs on all steel imports is a repeat of what happened in 2018 when similar tariffs were introduced. At that time the tariffs increased costs for US manufacturers and led to retaliatory tariffs from Canada and other trade partners. The economic impact was big – Canadian steel and aluminum producers lost business and retaliatory tariffs were imposed on a range of American goods. The 2018 tariffs also didn’t revitalize US steel production which was 1 percent lower in 2024 than 2017 despite those protectionist measures.
This time the tariffs will hit even harder. Unlike 2018 when Canada and Mexico were eventually exempted after negotiations, this time Trump has said his tariffs will apply to “everybody”. That means the Canadian steel industry will once again be caught in the crossfire and with it the metallurgical coal industry that supplies it.
If Trump’s steel tariffs prevent U.S. manufacturers from importing steel due to higher costs, steel production will decline. That will mean lower global demand for metallurgical coal including B.C.’s high grade supply. B.C. coal miners are already facing challenges from environmental policies, competition from other jurisdictions and regulatory delays. A downturn in demand from steel producers could be the trigger for more mine closures or reductions in production.
Plus these tariffs could start another trade war. Canada retaliated in 2018 with tariffs on U.S. goods like orange juice and whiskey and similar measures may follow this time. The uncertainty will delay investment decisions in Canada’s mining sector especially for new projects or expansions that rely on stable steel demand.
The long term viability of metallurgical coal is already in question as the steel industry looks towards greener production methods like hydrogen based steelmaking. Sweden has already developed facilities that don’t require coking coal and while the transition to such technologies will take decades the latest trade disruptions could accelerate that shift.
Trump’s tariffs are meant to protect U.S. steel makers but history shows they often have the opposite effect, increasing costs for American manufacturers and economic instability for key trading partners. For B.C.’s coal industry the combination of declining steel demand, disrupted supply chains and potential trade retaliation puts the sector in a tough spot.
British Columbia’s coal industry is deeply connected to global steel production making it very exposed to Trump’s latest tariffs. The move will reduce demand for metallurgical coal, disrupt export markets and add more financial stress to the province’s miners. Given Trump’s track record on trade B.C. should prepare for economic uncertainty and look at diversification strategies to mitigate the impact of another round of U.S. protectionism.