The CEO of Stelco’s American parent company has stated that they will defend themselves if Ottawa takes legal action following the decision to halt production at a steel mill in Hamilton, leading to potential layoffs for up to 500 workers. This move is partly attributed to the ongoing trade tensions between Canada and the U.S.
Following this announcement, Prime Minister Mark Carney mentioned that Ottawa will utilize all available powers against Cleveland-Cliffs, emphasizing that they will pursue legal actions against the Ohio-based company to the fullest extent.
In a recent interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves highlighted the importance of Stelco’s ability to freely sell steel from Hamilton to U.S. buyers as a key condition agreed upon during the company’s acquisition in 2024. This condition included maintaining substantial employment levels in Canada and significant operations in Hamilton, all within the framework of the Canada-U.S.-Mexico Agreement (CUSMA) which was in effect at the time of the acquisition.
Goncalves emphasized that the ability to sell into the U.S. market was a critical factor in acquiring Stelco and expressed disappointment over the current state of trade relations between the two countries. Despite the escalating trade war, CUSMA remains in place until 2036, even though talks for its renewal were halted by the U.S. in July.
Regarding the layoffs planned by Stelco, the company directly attributed its decision to the trade dispute initiated by U.S. President Donald Trump, who imposed significant tariffs on foreign steel under Section 232 of the Trade Expansion Act. This move led to retaliatory duties from Canada on various U.S.-made steel products.
Goncalves defended his support for Trump’s tariff measures, stating that it was not contradictory to his support for Canadian steelworkers. He emphasized that investments in Canada are made out of belief in the country, its people, and the workforce.
Cleveland-Cliffs acquired Stelco in a multi-billion-dollar deal in 2024, with the transaction highlighting the importance of national interests and workforce considerations. Goncalves explained that market pressures from foreign steel imports have influenced Stelco’s decision to focus on hot-rolled products due to limited market capacity.
Despite claims of no existing orders, internal sources at Stelco have indicated customer interest in placing orders, raising questions about the company’s decision-making process. Goncalves clarified that insufficient orders at viable price levels are the primary challenge, rather than a lack of financial resources.
As discussions surrounding financial assistance continue, Goncalves reiterated that the fundamental issue lies in the uncertainty surrounding Canada-U.S. trade relations, emphasizing that financial support alone cannot resolve the underlying trade challenges faced by Stelco.
