US Tariffs Threaten Great Lakes Shipping Tied To Canada Trade

Sep 19, 2026 (Bloomberg) –The American Century often draws a crowd when the ship pulls into the Port of Duluth-Superior to load Minnesota iron ore. Kids cheer when the captain blasts the fog horn. A voice on the loudspeaker retells the story of how the 1,000-foot-long bulk carrier has sailed the Great Lakes for nearly a half century. It’s a momentary flashback to the waning days of US industrial primacy. The vessel was built in 1981 in Sturgeon Bay, Wisconsin, and runs on four General Motors Co. diesel engines that generate more horsepower than a dozen Formula 1 cars. It set records for coal payloads in the 1990s. The current owner is American Steamship Co., a unit of Mainstay Maritime that’s based in Williamsville, New York, and was founded in Buffalo in 1907. But for all the Made-in-America pride, aging “lakers” like American Century have depended on a regional economy that moved in lockstep with Canada. Coal volumes have hit hard times, and US tariffs have disrupted trade in iron ore. Adding to the uncertainty now is a rift between Ottawa and Washington that threatens lasting damage to supply chains across land and water geared for free-flowing commerce. “Hope isn’t a strategy, but we would expect that this trade war comes to an end at some point and we can get back to regular business,” said Kevin Beardsley, executive director of the Duluth Seaway Port Authority, located less than 200 miles from the Canadian border. “Canada is looking at different supply chains and that type of thing, and that is a risk the longer this goes on.” President Donald Trump has offered mixed messages recently, saying in Ireland last weekend that there may be a deal with Canada “fairly soon” but issued fresh threats when asked this week about Ottawa’s overtures to the European Union. Prime Minister Mark Carney told Bloomberg News on Monday that Canada is “ready to sit down” for talks. That would come as welcome relief to those who depend on waterborne cargo between by both countries. Through August, vessel traffic at Duluth-Superior was down 23% from a year earlier, according to data provided by the port. Visits by US-flagged ships fell about 19% and arrivals by Canadian carriers sank 37%. Coal volumes totaled 4.7 million tons in 2025 and are on track to reach just 500,000 tons this year, the lowest level since 1973. While the overall drop is blamed mostly on the closure of a coal terminal, there’s also less northbound tonnage of iron ore, the steel-making feedstock mined near Duluth in the US’s richest iron ranges, hauled across the lakes and delivered these days mostly to mills in Ohio or Indiana. Trump’s tariffs on the metal have done significant damage to Canada’s steel sector. Domestic iron ore shipments from Duluth-Superior are running 40% below the 2025 pace. The biggest of the Great Lakes ports by tonnage, Duluth-Superior sits on the western edge of a 2,300-mile (3,700-kilometer) trade route that includes the St. Lawrence Seaway, all connected by locks. The maritime borders between the countries extend across Lake Superior, Huron, Erie and Ontario, and a stretch of the St. Lawrence River that eventually spills into a gulf near the Atlantic Ocean north of Nova Scotia. With about two-fifths of the US-Canada border going across water, 200 million tons of cargo — bulk commodities including coal, grain, iron ore, limestone, salt, sand and stone — move annually on the Great Lakes and the St. Lawrence. By comparison, American railroads haul about 1.5 billion tons of raw materials and finished goods a year. “Over decades and decades of time, the Great Lakes, the states and the provinces have become a hugely integrated – the third-largest economy in the world if it was a country,” with $6 trillion in economic activity across the region, said Ian Hamilton, president and CEO of the Hamilton-Oshawa Port Authority, or HOPA, a marine port network on Lake Ontario near Toronto. Lately his US counterparts are “all kind of scratching their heads going, ‘Why are we disrupting this integrated market?’” Hamilton said of the recent volley of tariffs. “We’ve crossed the borders to drink in each other’s bars and eat other’s food and vacation at each other’s properties.” Among the strategies to diversify its dependence away from the US, HOPA is working with the city of Sault Ste. Marie — an Ontario industrial town that’s home to a troubled steel mill — to propose a new port there and develop road and rail infrastructure to better link the resource-rich areas of Canada with domestic consumer markets and trading partners overseas. The US economy can probably get by with fewer imports from Canada, but such dislocations might get expensive. “I certainly appreciate that the United States could probably survive on less trade with Canada, but I also think that ultimately drives up the costs for everybody,” Hamilton said. Joint Effort While politicians and trade negotiators squabble, the day-to-day management of the Great Lakes-Seaway system is shared between the governments. Canada controls 13 locks and the US oversees two. In a speech in late August, Lana Payne, national president of labor group Unifor, credited Canadians with building the seaway, though the major upgrades in the 1950s were a joint effort after Washington’s initial hesitance. “Canada was feeling really good — it had made a huge contribution to the Second World War and it really felt it was mature,” said Ron Stagg, a retired Toronto Metropolitan University professor and author of a 2010 book on the seaway’s history. As the engineering plans began to take shape, Canadian officials told the US, “if you don’t want to participate, we’re going to do it ourselves. So the US said, maybe we’ll take part, too,” Stagg said. Territorial questions have resurfaced. Recently a social media campaign pushed for Canadians to declare sovereignty over the “Strait of Our Moose”. That’s a reference to the Welland Canal, which sits on the Canadian side of the border and connects Lake Erie with Lake Ontario — it’s how ships get around Niagara Falls. The campaign is also a dig at Trump’s inability so far to restore trade flows through the Strait of Hormuz in the US war with Iran. Still, the Canadian waterways are unlikely to become weaponized chokepoints during a full-blown trade war: Navigating the St. Lawrence River “shall forever remain free and open for the purposes of commerce to the citizens of the United States,” according to the 1871 Treaty of Washington signed by Great Britain and the US. Yet tensions do exist in regional shipping, and they go deeper than the recent tariff exchanges between Carney and Trump. US-flagged vessel owners say they’re competing on an unlevel playing field because of rules that favor their Canadian rivals. Jim Weakley, president of the Lake Carriers’ Association, a Westlake, Ohio-based group representing US shipping companies, declined to comment about the trade dispute, saying it “has not impacted binational maritime trade on the Great Lakes.” That’s partly because most business is conducted in long-term contracts and the spot market is too thin to see any impact, according to Weakley. A broader issue facing his members has echoes of the Trump administration’s reasons for going after Canada and other trading partners – accusations of unfairness and an openness to China. “Canada has flagging laws, regulations and practices that endanger the economic viability, efficiency and service reliability of the US-flagged Great Lakes fleet’s binational trade that also has resulted in the shrinking of the US-flagged Great Lakes fleet,” according to a position paper Weakley sent via email. ‘Canadian Monopoly’ The disparity “has created a Canadian monopoly on the binational Great Lakes trade,” according to the paper, which lists several grievances, including Canadian support for “the growth of the Chinese shipping building empire and receiving ships that have been subsidized by the Chinese government.” It’s not that Canadian operators prefer to buy their vessels from China’s producers, said Jason Card, vice president of external affairs with the Chamber of Marine Commerce, a binational group in Ottawa representing ship owners, port operators and other stakeholders. “It’s difficult to find a shipyard that’s willing to build a laker vessel” because of the unique narrow design and limited orders, said Card, who voiced support for the Trump administration’s efforts to revive American shipbuilding. “There’s not a desire to build far from home, it’s just been the reality for the past several years that there’s no available capacity.” Card said US carriers have, over the years, largely focused on shipping coal and iron ore through the western lakes with their older and bigger vessels, while the Canadians grew to dominate areas where smaller boats are needed to traverse the locks. “Unfortunately in the current situation, there’s a pinch on steel, and coal is going out of fashion,” he said. That’s been a stark reality for local businesses that see ships like American Century as economic workhorses. At the Duluth port authority, Beardsleynotes that Duluth-Superior terminals saw iron ore volumes last year drop by about 3 million tons from a year earlier, mostly because of weaker exports to Canada. Higher-value breakbulk cargo — like sections of giant wind turbines or industrial machinery — is increasing, though, with the help of an energy sector supplying oil, gas and wind projects spanning the middle of North America. “We’re hoping that the two countries can come to an understanding and an agreement that’s really mutually beneficial to binational trade,” he said. “That’s the key to success for our port and the region.” A false intelligence report produced with the help of artificial intelligence nearly led the U.S. military to intercept and board a Chinese ship in the Middle East during the war... 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