Tariff Pressures Mount: Stelco Announces Cuts as Cross-Border Trade War Escalates
U.S. President Donald Trump says he believes he can strike a trade agreement with Canada in the coming weeks, a prediction he offered just before new import bans on select Canadian goods take effect.
This previously announced escalation of the U.S.-Canada trade war by Washington will bar some Canadian alcoholic beverages, motorcycles and other products at 12:01 a.m. on Tuesday.
Mr. Trump, speaking to reporters at the White House on Monday, said he’s betting the Canadians will agree to what he called “a fair deal” in three to four weeks. “They’re going to come in, and they’re going to say, ‘Sir, we are sorry.’”
He spoke after unveiling plans for a massive steel plant in Iowa – representing what the White House said would amount to an US$18-billion investment that would create more than 1,700 long-term jobs. Mr. Trump touted this as evidence that his protectionist trade policy is forcing manufacturing to relocate back to the United States.
It was the same day Stelco Holdings announced it will lay off hundreds of steel workers in southern Ontario as it shuts down a major part of its Hamilton plant, saying this is a necessary move to survive in the face of U.S. tariffs. Mr. Trump has imposed 50-per-cent levies on steel from Canada.
In a memo to staff obtained by The Globe and Mail, Paul Simon, president and general counsel at Stelco, said that around Oct. 9 it will shut down its cold-rolled and coated operations at Hamilton Works.
“This is an unfortunate but necessary action to ensure survival of Stelco in what has become a challenging and unsustainable steel market for these products,” he wrote in the memo.
He said that as many as 500 employees will be affected both in Hamilton and at Lake Erie Works in Nanticoke, Ont.
Ottawa on Monday declined to respond to Mr. Trump’s talk of a trade deal in the near future.
While Mr. Trump is predicting Canada will capitulate in the weeks ahead, Kirsten Hillman, former Canadian ambassador to the United States, predicted earlier in September that it could be months before Ottawa returns to the bargaining table with Washington.
A spokesman for Dominic LeBlanc, the federal Minister responsible for Canada-U.S. Trade, acknowledged the new bans on some Canadian imports, which Mr. Trump first announced early this month.
The bans largely target alcohol packaged for consumers, including beer and many types of wine. While there are other banned items, such as motorcycles and dairy, Canadian alcohol products account for 87.6 per cent of the goods set to be banned by dollar value.
Gabriel Brunet, director of communications for Mr. LeBlanc, said Canada’s focus will be “on what we can control,” including economic growth inside this country and diversification of trade around the globe.
“As has been the case for the last 18 months, our first priority remains on protecting and supporting Canadian workers, farmers, families and businesses from these unjustified actions,” Mr. Brunet said.
Mr. Trump, celebrating a new steel investment in the United States, repeated his now-familiar allegations about Canadian trade practices and, at one point, suggested this country is worse than China.
“We get along with China, we get along with the people and we make good deals, but Canada has been really very difficult to deal with,” the President told reporters.
He cited Canada’s steep tariffs on some foreign farm imports and his repeated grievances about Canada’s military spending levels. “They feel entitled,” he said of Canadians. “They have to treat our country with respect.”
Mr. Trump’s announcement about a potential Iowa steel plant was made as he seeks to bolster his economic record ahead of November’s midterms, with his approval rating plumbing all-time lows of late as the Republican Party confronts voter concerns about inflation and the cost of living. The Republicans are in the midst of several competitive races in Iowa.
Mr. Trump unveiled the project with executives from Mesabi Metallics, which recently opened Minnesota’s first new iron ore mine in 50 years. It was not immediately clear why Mesabi aims to build a steel mill in Iowa using iron ore extracted from Minnesota.
Brian Clow, a deputy chief of staff under then-prime minister Justin Trudeau, said he thinks Mr. Trump has little incentive to strip U.S. tariffs from Canadian products.
He said Monday’s announcement of the Stelco steel plant idling as well as the Iowa steel investment are likely affirmations to Mr. Trump that his protectionist policies are working.
“My main conclusion from Monday is he’s quite satisfied with his trade agenda and it will not be easy to get these tariffs removed from Canadian goods,” Mr. Clow said.
“This is exactly what Trump wanted when he returned to office, to harm our steel plants and move those jobs to the U.S.”
Talks to resolve a trade war sparked in 2025 by Mr. Trump fell apart this August when Canada walked away from the table. Prime Minister Mark Carney said at the time the U.S. was offering a “bad deal” that “asked too much and offered too little” for this country. He said the U.S. proposal would have curtailed Canadian sovereignty and eroded or destroyed major industries here.
The U.S. began collecting 50-per-cent duties on roughly $28-billion of Canadian goods on Aug. 22, and Canada matched the tariffs dollar for dollar on Sept. 8. The U.S. tariffs are on top of existing levies on Canadian steel, aluminum, autos and lumber that were imposed earlier.
In Canada, Ron Wells, president of United Steelworkers Local 1005, said that the closing of the cold-rolled section of the Hamilton plant will result in 350 layoffs at that site.
“It’s tough news. It’s devastating,” he said. “I mean Christmas really isn’t that far away.”
Pat Persico, senior director, corporate communications, with the company’s U.S. parent, Cleveland-Cliffs Inc., wrote in an e-mail that Stelco plans to concentrate its steel production at Lake Erie Works, which is south of Hamilton.
She said that total tonnage of steel produced will not be affected, but there will be a change in the product mix, with a higher concentration of hot rolled steel products.
In addition, she said jobs would be offered to some of the Hamilton employees hit by layoffs.
“We expect that a significant number of employees affected by the indefinite idle at Hamilton should be absorbed at Lake Erie Works,” she said.
Mr. Wells, however, said there are only 46 job openings at Lake Erie Works for workers at the Hamilton plant who are facing layoffs.
“That’s not a very significant number when you’re taking about that many people out of work,” he said.
With reports from Meera Raman, Nathan VanderKlippe and Reuters
This article was first reported by The Globe and Mail
