Canadian aluminium trader blames bankruptcy on Trump trade war

Washington - A Canadian aluminium trader that had been struggling to restructure its debt has filed for bankruptcy in the United States and Canada, saying that US President Donald Trump’s trade war helped push the company over the edge.

Sinobec Group is one of the first companies to directly blame Mr Trump’s trade war for contributing to its bankruptcy.

Experts have been predicting that a wave of restructurings will hit the US later in 2025, especially among retailers and importers that rely on Chinese manufacturers. 

Sinobec arranges deals between sellers and buyers of aluminium ingots, as well as finished items like building products, shower doors and fences, the company said in court papers filed on May 27.

For about two years, Sinobec had been working with lenders after defaulting on one of its loans, company owner and chief executive Zhong Li said in court papers.

Sinobec eventually hired financial advisor Alvarez & Marsal to help refinance about US$103 million (S$132.7 million) of debt, and lenders agreed to avoid taking action against the company.

Tariffs imposed in recent months by Mr Trump hit Sinobec hard, the company said. 

“This has exposed the debtors to the full impact of the trade war,” company restructuring adviser Philippe Jordan, with PricewaterhouseCoopers, said in court papers. “Significant accounts receivable collections have halted, as the supply chain upon which the debtors rely for payment has ground to a halt.”

In April, Mr Trump unilaterally imposed tariffs of 145 per cent on goods from China.

Although he later lowered the duties to 45 per cent, the reduction did not help Sinobec because the cost “is still well above the market’s ability to absorb”, the company said in court papers.

Sinobec gets its aluminium from various countries, including China, Turkey and India.

Most sales, however, are in North America, with more than 40 per cent of the company’s customers in the US, the company said.

Before filing for court protection from creditors, the company had cut staff and reduced salaries.

Sinobec employs 76 people at its headquarters in Montreal and in Florida. The company’s assets are worth about US$232 million, according to court papers.

The company has between US$600 million and US$800 million in annual revenues, and carries about US$170 million in debts, primarily owed to a banking syndicate led by Bank of Montreal, according to a person familiar with the matter.

While under court supervision, Sinobec will try to sell itself to help repay creditors, according to court papers. BLOOMBERG