The CEO of Stelco’s American parent company has stated that they will take action to protect themselves if Ottawa initiates legal action following the decision to halt production at a steel mill in Hamilton, leading to potential layoffs of up to 500 workers, partly due to the ongoing trade dispute between Canada and the U.S.
This response comes after Prime Minister Mark Carney expressed intentions to utilize all available measures against Cleveland-Cliffs, urging the Ohio-based firm to be pursued to the fullest extent of the law.
During an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized the importance of Stelco’s ability to freely sell steel produced in Hamilton to U.S. buyers, which was a fundamental condition agreed upon during the company’s acquisition in 2024. Goncalves highlighted the significance of maintaining substantial employment levels and operational activities in Hamilton as part of the terms.
Goncalves emphasized that the Canada-U.S.-Mexico Agreement (CUSMA) was already in effect at the time of the acquisition, underlining the critical aspect of being able to sell into the United States for him to acquire Stelco.
Despite the ongoing trade tensions, CUSMA remains operational until 2036, even though discussions for a renewal were halted by the U.S. in July.
Regarding the layoffs at Stelco, the company directly attributed the decision to the trade conflict between U.S. President Donald Trump and Canada. The Trump administration imposed hefty tariffs on foreign steel under Section 232 of the Trade Expansion Act, prompting retaliatory duties from Canada on various U.S.-made steel products.
Goncalves defended his support for Trump’s tariff measures, emphasizing that investing in Canada demonstrates a commitment to the country, its people, and the workforce. The acquisition of Stelco by Cleveland-Cliffs further reinforced the importance of national interests and workforce considerations, as stated during the deal announcement in November 2024.
The decision to cut jobs at Stelco was tied to the pressure created by foreign steel imports in the Canadian market, particularly impacting the demand for Stelco’s cold-rolled steel products. Goncalves clarified that due to market dynamics and competition, Stelco had opted to focus on hot-rolled products instead.
While Goncalves mentioned a lack of viable orders at sustainable price levels, internal sources at Stelco contradicted this claim, stating that there are customers willing to place orders. Additionally, Carney highlighted available financial support to mitigate the trade war’s effects on companies like Stelco, but Goncalves indicated that the company’s primary concern was the uncertainty surrounding Canada-U.S. trade relations.