The CEO of the parent company of Stelco in the U.S. stated that they will defend themselves if faced with a lawsuit from Ottawa following the decision to halt production at a steel mill in Hamilton, resulting in potential layoffs of around 500 employees. This move is attributed in part to the ongoing trade tensions between Canada and the United States.
In response, Prime Minister Mark Carney emphasized that Ottawa will leverage all available powers against Cleveland-Cliffs, the Ohio-based company, to the fullest extent of the law.
During an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves highlighted the importance of Stelco’s ability to freely sell steel produced in Hamilton to U.S. buyers as a fundamental condition agreed upon during the company’s acquisition in 2024. This condition included maintaining substantial employment levels in Canada and operational activities in Hamilton, as stipulated under the Canada-U.S.-Mexico Agreement (CUSMA) at the time of the acquisition.
Goncalves expressed that the ability to sell steel in the United States was a crucial factor in acquiring Stelco, emphasizing that the developments in the trade relationship between Canada and the U.S. were unforeseen at the time of the purchase.
Despite the ongoing trade dispute, CUSMA remains in effect until 2036, even though talks for its renewal were halted by the U.S. in July.
The decision to lay off up to 500 workers at Stelco was directly related to the trade tensions between President Donald Trump’s administration and Canada. The imposition of 50% tariffs on foreign steel by the Trump administration last year, along with retaliatory measures from Canada, has impacted the steel industry.
Goncalves explained that foreign steel imports to Canada have created challenges for Stelco’s cold-rolled steel production, leading the company to focus on hot-rolled products. He clarified that the decision was driven by the market dynamics and the lack of viable orders rather than turning down existing offers.
Furthermore, while Carney mentioned the availability of financial support to mitigate the trade war’s effects, Goncalves emphasized that the primary issue lies in the uncertainty surrounding Canada-U.S. trade relations rather than financial constraints.
Cleveland-Cliffs acquired Stelco in a multi-billion-dollar deal in 2024, emphasizing the importance of national interests and workforce considerations in the transaction.