The CEO of the parent company overseeing Stelco in the U.S. defends the decision to halt production at a Hamilton steel mill, leading to around 500 job cuts, citing the ongoing trade tensions between Canada and the U.S. This statement comes in response to Prime Minister Mark Carney’s pledge to take legal action against Cleveland-Cliffs, the Ohio-based company, using all available tools.
According to Cleveland-Cliffs CEO Lourenco Goncalves, the ability for Stelco to freely sell steel to U.S. buyers was a crucial condition agreed upon during the company’s acquisition, which included commitments to maintain substantial employment levels and operations in Hamilton. Goncalves noted that the Canada-U.S.-Mexico Agreement (CUSMA) was already in effect at the time of the acquisition.
Despite the trade war, CUSMA remains active until 2036, even though the U.S. halted negotiations for a renewal in July. Goncalves emphasized that his actions are within the bounds of responsible business ownership and expressed readiness to address Carney’s legal challenges in court.
The decision to lay off up to 500 employees at Stelco was directly attributed to the trade conflict initiated by President Donald Trump, who imposed significant tariffs on foreign steel imports under Section 232. Carney criticized Goncalves for supporting these tariffs, but Goncalves defended his stance, emphasizing that his investments in Canada are in support of the country and its workforce.
Goncalves highlighted that foreign steel imports have impacted the market for Stelco’s cold-rolled steel production, leading the company to focus on hot-rolled products due to market pressures. While there were claims of no incoming orders, sources within Stelco indicated a demand for orders, although the industry continues to face challenges amidst the trade uncertainties between Canada and the U.S.
Goncalves clarified that the issue lies in the lack of viable orders at sustainable price levels rather than a shortage of funds, rejecting the notion that financial aid could alleviate the trade war’s impact on Stelco’s operations.
