The CEO of the parent company of Stelco in the U.S. has stated that they will take legal action to defend themselves if Ottawa decides to take them to court following their decision to halt production at a steel mill in Hamilton, leading to the potential layoff of around 500 employees. This decision is partly attributed to the ongoing trade conflict between Canada and the U.S.
In response, Prime Minister Mark Carney has affirmed that the Canadian government will utilize all available legal mechanisms against Cleveland-Cliffs, the Ohio-based company, to the fullest extent permitted by the law.
Lourenco Goncalves, the CEO of Cleveland-Cliffs, explained in an interview with CBC News that the ability of Stelco to freely sell steel produced in Hamilton to U.S. customers was 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.
Goncalves emphasized that the Canada-U.S.-Mexico Agreement (CUSMA) was already in force at the time of the acquisition, and the ability to sell steel into the U.S. was crucial for him to acquire Stelco. He expressed regret over the current strained trade relations between the two countries, stating that he would not have made the acquisition if he had foreseen the deterioration of trade ties.
Despite the ongoing trade tensions, CUSMA remains effective until 2036, although discussions on its renewal were halted by the U.S. in July.
Regarding the layoffs at Stelco, which are linked to the trade war initiated by President Donald Trump, Goncalves mentioned that foreign steel imports into Canada have created challenges for the market for Stelco’s cold-rolled steel. He clarified that the company decided to focus on hot-rolled products due to market pressures.
Goncalves disputed claims of turning down orders, stating that there were simply no orders to decline. While Carney has proposed financial assistance to mitigate the impact of the trade war, Goncalves emphasized that the core issue was the uncertainty in Canada-U.S. trade relations and not financial constraints.
In conclusion, Goncalves indicated that the key challenge for Stelco was the lack of adequate orders at viable price levels, highlighting the complexities faced by businesses amidst the ongoing trade tensions between Canada and the U.S.