The CEO of Stelco’s American parent company has stated that they will take legal action to defend themselves if Ottawa proceeds with a lawsuit following their decision to halt production at a steel mill in Hamilton, resulting in potential layoffs of up to 500 employees. This move is partly attributed to the ongoing trade tensions between Canada and the U.S.
In response, Prime Minister Mark Carney has affirmed that Ottawa will utilize all available legal measures against Cleveland-Cliffs, the Ohio-based company, in pursuing the matter to the fullest extent of the law.
Cleveland-Cliffs CEO Lourenco Goncalves highlighted in an interview with CBC News that the ability of Stelco to freely sell steel produced in Hamilton to U.S. buyers was a fundamental condition agreed upon when they acquired the company in 2024. This condition included commitments to maintain substantial employment levels in Canada and operations in Hamilton, in line with the Canada-U.S.-Mexico Agreement (CUSMA) in effect at the time of the acquisition.
Despite the current trade disputes, CUSMA remains valid until 2036, even though discussions on its renewal were suspended by the U.S. in July.
Goncalves emphasized that the ability to sell steel into the U.S. market was essential for acquiring Stelco, expressing regret over the strained trade relations between the two countries.
The decision to lay off up to 500 workers at Stelco is directly linked to the trade conflict initiated by President Trump’s imposition of hefty tariffs on foreign steel under Section 232 of the Trade Expansion Act, prompting retaliatory duties from Canada on various U.S.-made steel goods.
Carney criticized Goncalves for supporting Trump’s tariff actions, but Goncalves defended his stance, stating that his investments in Canada were made to support the country and its workforce, emphasizing that “America first is not America only.”
Following the acquisition of Stelco by Cleveland-Cliffs in a multi-billion-dollar deal in 2024, Goncalves highlighted the importance of national interests and the workforce in the transaction.
Goncalves explained that the influx of foreign steel imports in Canada has impacted the market for Stelco’s cold-rolled steel production, leading the company to focus on hot-rolled products due to market constraints.
While Goncalves mentioned the lack of viable orders as a reason for the production shift, internal sources at Stelco indicated that there were customers interested in placing orders, contradicting this claim.
Goncalves clarified that the issue lies not in financial resources but in the uncertainty surrounding Canada-U.S. trade relations, indicating that monetary assistance may not address the fundamental challenges faced by the company.
