Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
What Fintechs Need to Know About New U.S. Tariffs
Economy | Feb 11, 2025
Image: Freepik/evening tao
New Tariffs, New Tensions to Disrupt Trade Relationships Globally
President Trump has once again thrown a wrench into global trade by announcing fresh 25% tariffs on all imported steel and aluminum into the United States without exception to take effect on March 12, 2025. For now, Canada and Mexico have been granted a 30-day pause (triggered from the most recent tariff showdown) but concerns are mounting.
See: Tariff Trade War Hits Canada – What’s Happening
For Canada, this is a direct hit to a major industry given that Canada is the largest supplier of steel and aluminum to the U.S. which represents about 58% of Aluminum and 22% of Steel imported into the U.S. in 2024. 90% of all of Canada's Aluminum and Steel is exported to U.S. companies, so these new tariffs will impact multiple sectors and trade relationships.
Will History Repeat Itself? Canada's Response
This isn't the first time Trump has slapped tariffs on Canadian imports. In 2018, the Trump administration applied a 25% tariff on Steel and 10% on Aluminum. Back then, Canada retaliated with its own tariffs on $16.6 billion worth of U.S. goods like Florida orange juice, agriculture, steel and consumer goods like maple syrup, whisky and ketchup. Eventually the U.S backed down in 2019 due to pressure from American manufactures, setting the stage to finalize the Canada-US-Mexico CUSMA trade agreement. Make no mistake though, the 2018 tariffs initially inflicted economic pain in both Canada and the U.S.
Prime Minister Trudeau has called these fresh new tariffs "unjustified" and warned that Canada will respond firmly if the tariffs extend beyond the 30-day pause. Ottawa is continuing to explore countermeasures.
Interesting to note that CUSMA is scheduled for joint review next year, July 1, 2026 which is 6 years after it originally came into force in 2020. Participant countries will reassess and propose revisions. Notably, the agreement is set to expire in 2036 unless all parties agree in writing to extend it for another 16 years. Many believe that the Trump administration is pushing tariffs now on Canada and Mexico to renegotiate CUSMA in 2025 instead of waiting until 2026.
Global Reaction
The European Union is already preparing retaliatory tariffs on U.S. exports. The United Kingdom is warning of potential disruptions to its own steel industry. China has called the tariffs "a reckless act" and hinted at taking the matter to the World Trade Organization.
Following the announcement of the new 25% tariffs on steel and aluminum imports, U.S. steel and aluminum producers experienced significant stock market gains. For example, Cleveland-Cliffs (+18%), Nucor (+6%), and Steel Dynamics (+5%), Century Aluminum (+10%), and Alcoa (+2.2%). Large manufacturers are recalculating costs and adjusting supply chains in attempt to avoid sudden price hikes.
What This Means for the Economy and Fintechs
Fintechs while they don't trade steel and aluminum, they aren't immune to impacted markets and supply chains. Tariffs and trade wars create market volatility which could increase demand for risk management tools and alternative investment platforms, areas where fintechs have a growing presence.
See: Stephen Poloz’s Plan to Fix Canada’s Economy
- Manufacturers facing higher costs may turn to fintech lenders to help smooth out cash flow challenges, so an opportunity for fintechs providing supply chain financing.
- Fintechs operating foreign exchange services may see increased activity due to currency fluctuations and trade uncertainty.
- Retail investors may gravitate towards safer assets, affecting fintech and alternative trading platforms.
- As tariffs impact global trade policies, cross-border payments and compliance services could be adjusted, and should be monitored.
What's Next
Between the March 12 deadline and the 30-day pause, Canada (and Mexico) should be looking to negotiate a better deal given CUSMA, however it's uncertain if the U.S. will offer any exemptions, and so Canada may be forced to retaliate.
For businesses, now is the time to prepare. Given what happened in 2018/19, there's a possibility that these tariffs may not last but only if the right economic and political pressure is achieved. The coming weeks will be critical and could define the broader future of trade between Canada and the U.S. Until then, monitor closely and support Canada by buying local.
🇨🇦 Support Buy Canadian Initiatives!
We're all consumers. Here are just a few links you may be interested in. Do your research and make the right choice and support/buy Canadian products:
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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