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Globe and Mail
4 days ago
- Business
- Globe and Mail
What our forebears built, tariffs will break. We must defend the Canadian steel industry
Matthew Shoemaker is the mayor of Sault Ste. Marie, Ont. In the 1890s, a Maine entrepreneur backed by financiers from Philadelphia and New York arrived on the north shore of Lake Superior, seeking opportunity where others saw decline. That man, Francis Clergue, found it in a fur-trading post named Sault Ste. Marie. Though industry had yet to take root, Mr. Clergue saw potential in the rapids, and the promise they presented of cheap, renewable power. Over the next decade, his vision transformed the region. The half-finished hydroelectric dam was completed, and another was built across the river on the American side. A steel plant, a paper mill and a railway up to Wawa, Ont., and beyond to mine iron ore followed. What had been the Canadian hinterland became a hub of cross-border industry, powered by shared natural resources and ambition. Today, more than a century later, that legacy endures. The hydroelectric dams in both Sault Ste. Marie, Ont., and Sault Ste. Marie, Mich., still generate power. The steel plant has gone through many ups and downs but survives as Algoma Steel Group Inc. And the industrial bond across the Great Lakes remains one of North America's most tightly woven economic fabrics. But now, that shared prosperity is under threat. Carney faces pressure to retaliate against Trump's steel, aluminum tariffs Algoma Steel CEO says 50% tariffs threaten viability in the U.S. In his second presidency, Donald Trump has returned to steel tariffs – this time with greater ferocity. Initially reinstated at 25 per cent in March, the steel tariffs doubled to 50 per cent on June 4. The consequences for producers such as Algoma Steel could be devastating and trigger an economic crisis unlike anything seen in living memory. To prevent that, both the federal and provincial governments must act quickly – not just to negotiate a resolution with the Trump administration, but to support workers and industries in the meantime. When tariffs were 25 per cent, Ottawa and Queen's Park had time to deliberate. At 50 per cent, the luxury of time is gone. Immediate relief is essential for steel hubs such as the Soo, Hamilton and Regina – all cities that punch above their weight in the North American steel trade. Algoma sources much of its iron ore from producers in the United States. Dozens of freighters make the daily passage across the Great Lakes, delivering U.S.-mined ore through the locks at Soo Michigan to the Canadian steelworks. That steel then flows back south and gets manufactured into Ford Broncos, Teslas, water heaters, steel beams and countless products made and sold by American companies. The integration doesn't end there. Canadian steel worker wages ripple across the border, too, and get spent at Michigan restaurants, department stores and tourist destinations such as Mackinac Island, Petoskey and Traverse City. This is what an integrated and mutually beneficial economy looks like. A 50-per-cent tariff severs more than trade routes: it breaks supply chains, undermines jobs on both sides of the border and risks inflaming economic nationalism. The U.S. doesn't produce enough steel to meet its own needs. Therefore, unless capacity expands dramatically, tariffs will simply raise prices, reduce supply and shift job losses from one sector to another. We've seen this before. During Mr. Trump's first round of steel tariffs in 2018, the U.S. steel industry gained 8,000 jobs. But manufacturers that depend on steel shed 75,000. Put another way: the job losses were nearly 900 per cent more than the job gains – a painful price for a short-lived political win. Communities like Sault Ste. Marie have weathered hard times before. To use an apt pun, we've developed spines of steel. But a 50-per-cent tariff on our largest export could have a ripple effect on both the Canadian and American economies. If we don't protect this interconnected system now, we risk unravelling decades of economic integration. And we may find ourselves forced to adopt the same protectionist policies we currently condemn, simply to rebuild what we've lost. Mr. Clergue came to the Great Lakes to build industry on the Canadian shores that would enrich his American financiers. We should use the success he left behind as an example – one that can guide us toward continued mutual benefit.
CTV News
6 days ago
- Business
- CTV News
Sault bracing for economic blow from U.S. steel tariffs
The United States' decision to double tariffs on Canadian steel and aluminum to 50 per cent took effect Wednesday, raising concerns over the future of Sault Ste. Marie's largest employer, Algoma Steel. Algoma steel A worker is shown at Algoma Steel in Sault Ste. Marie, Ontario on Friday, April 25, 2025. (File photo/THE CANADIAN PRESS/Sean Kilpatrick) 'I think we all know that at 50 per cent, the company will be selling everything at a loss, which is not a sustainable business,' said Bill Slater, president of United Steelworkers (USW) Local 2724, one of two unions representing Algoma Steel workers. With most of Algoma's business tied to U.S. markets, the tariff hike threatens significant economic fallout. The company declined an interview request but provided a statement previously sent to CTV News: The North American steel market is highly integrated, and Algoma Steel is deeply concerned with the announced increase in 232 steel tariffs to 50%. The Algoma Team remains in close consultation with our customers and the government regarding the challenges this presents to our business. Algoma is advocating for swift government action to support Algoma and the Canadian steel industry during this volatile time. — Algoma Steel, coporate affairs Mayor Matthew Shoemaker warned prolonged tariffs could devastate the city. 'There would be job losses. There would be secondary industries or suppliers that close. There would be restaurants that close. It would be … it would be the end of the community as we know it,' he said. Matthew Shoemaker An undated profile picture of Sault Ste. Marie Mayor Matthew Shoemaker. (File Photo/The City of Sault Ste. Marie) Slater noted 19 union members are already facing long-term layoff notices in July due to the previous 25 per cent tariffs, adding 'everybody is worried about their jobs.' While the federal government has proposed support measures – including Employment Insurance adjustments and increased naval shipbuilding contracts using Canadian steel – Slater said these won't provide immediate relief. 'They're all good infrastructure projects, all good things that we need for the country, but they're not going to help us today. They may help us in the future,' he said. He urged governments to 'stabilize the Canadian market', citing an influx of foreign steel driving down domestic prices. 'There's too much steel coming in from other countries because it's too hard for them to get into the U.S., and that's causing a lower price on the steel in Canada.' A meeting is scheduled for Friday between Algoma Steel, USW Locals 2724 and 2251, Mayor Shoemaker, MP Terry Sheehan, and MPP Ross Romano to discuss solutions. Steel coils cool at Algoma Steel Inc., in Sault Ste. Marie, Ont., Friday, April 25, 2025. THE CANADIAN PRESS/Sean Kilpatrick Steel coils cool at Algoma Steel Inc., in Sault Ste. Marie, Ont., Friday, April 25, 2025.(File photo/THE CANADIAN PRESS/Sean Kilpatrick) Shoemaker stressed the need for both short- and long-term fixes. 'At 50 per cent tariffs, there needs to both be a long-term solution or a permanent fix to the tariffs and a short-term solution to help plants immediately, because there is not the luxury of time to deal with the increased burden that is going to be placed on municipalities, the industry, and the community members affected by it,' he said.
CTV News
6 days ago
- Business
- CTV News
‘It's a real rough spot to be in': SW Ontario manufacturers grimace in face of hiked US tariffs
Machinery and workers are seen at Algoma Steel Inc., in Sault Ste. Marie, Ont., Friday, April 25, 2025. THE CANADIAN PRESS/Sean Kilpatrick Southwestern Ontario is not the steel hub of Canada, but multiple industries, large and small, rely on the product as a raw material to build products shipped to the U.S. ETBO, south of Aylmer, is one. The automotive parts and supply manufacturer is a big buyer of both. Roughly 40 per cent originates in the United States. 060425 - Steel Steel beam marked "Canada steel." (Sean Irvine/CTV News London) 'A million pounds of steel a week. A couple of million pounds of aluminum a month,' confirmed president & CEO Etienne Borm. 'So, we're significant consumers of this product.' And this product is under siege by U.S. Tariffs. Born said the trickle-down effect is hurting Southwestern Ontario. 'It's another, you know, attack on our industry and our country. It can be devastating to the Canadian economy. It's a real rough spot to be in right now.' As local firms and their employees cope with uncertainty and anxiety, Borm contends that American consumers are bearing the greatest impact of tariffs. 'It's the US taxpayer who pays it. I'm not going to pay it. Our margins don't allow for absorption of that.' Some who rely on steel for their livelihoods believe the fear of tariffs may be driving up prices of domestic steel more than is justified. Kevin Lansdowne, who has operated a small steel fabricating shop for nearly a decade, has noticed prices trending up. 060425 - Steel Kevin Lansdowne operates a small steel fabricating shop. (Sean Irvine/CTV News London) He states it has become difficult to predict prices and expenses. 'It's hard to quote a job, and then you get the go-ahead on the job, and then you find out your steel prices have gone up. It's like kind of like Covid times, you know, it's unpredictable. Do I stock up? Do I purge? I'm not sure there is a right answer for that.' However, Borm is confident that a solution is forthcoming. It is just a question of when. 'I personally believe that there's going to be some sort of negotiated deal in here and that, you know, that this is leverage in bargaining. ' A sentiment we heard from a half-dozen more steel consumers, suppliers and manufacturers in the region. All are hopeful that uncertainty will end. 'What goes down will come up again. And I see a great future for Canada because I think we're pretty abundant in resources,' shared an optimistic Lansdowne.
Globe and Mail
6 days ago
- Business
- Globe and Mail
Algoma CEO calls for Ottawa to level steel tariffs on foreign dumpers right away
Algoma Steel Group Inc. chief executive Michael Garcia is calling on Ottawa to immediately bring in tariffs on all imports of foreign steel into Canada to protect the industry in the face of tremendous pressure being exerted by U.S. President Donald Trump's trade war. As of Wednesday morning, Mr. Trump doubled the tariff on almost all foreign steel being imported into the U.S. to 50 per cent, including everything from Canada. The supercharged tariff threatens the viability of the entire Canadian steel industry. About half of the 12 million tonnes of steel produced in Canada every year is sent to the U.S., but the business case has evaporated. Mr. Garcia said in an interview that unless the price of steel skyrockets, the company's U.S. business isn't viable anymore. 'I am advocating for Section 53 tariffs not as a retaliatory measure against the U.S., but as a prudent move to protect a vital strategic industry,' he said in an interview. Under Canada's Customs Tariff law, section 53 tariffs can be imposed by Ottawa in cases where unfair trade practices are occurring that is harming domestic trade. Section 53 tariffs on foreign imports into Canada of steel coil and plate will address the long-standing dumping problem that sees mills from countries such as Turkey, Vietnam and the Middle East selling the metal at artificially low prices in order to gain market share in Canada, Mr. Garcia said. Addressing dumping will allow Algoma to win more business in its home market and potentially make up for some of the revenue it is losing in the U.S. 'They could do it very fast and that would have an immediate positive effect for the Canadian steel industry,' said Mr. Garcia of the impact of section 53 tariffs. 'It would also be seen very favorably by the U.S.' Mr. Trump on Tuesday in his executive order said a major motivation behind jacking up the steel tariffs was addressing dumping by foreign producers that was still occurring in the U.S. market. Barry Zekelman, the CEO of Chicago-based Zekelman Industries, the largest independent steel pipe and tube manufacturer in North America, told The Globe and Mail on Tuesday that Mr. Trump is clearly sending a message to Ottawa that dumping is a huge problem in this country that must be fixed. Mr. Garcia spoke with Industry Minister Mélanie Joly earlier on Wednesday and Finance Minister François-Philippe Champagne about the need to take urgent action. But for now Ottawa is not taking any immediate steps on dumping or retaliatory tariffs. Prime Minister Mark Carney on Wednesday said Canada will not immediately fight back in the face of the higher tariffs on both steel and aluminum. 'We will take some time, not much, some time, because we are in intensive discussions right now with the Americans on the trading relationship,' he said before a caucus meeting Wednesday. Ms. Joly at a media availability later on Wednesday in Ottawa said she has met with about 10 steel and aluminum CEOs over the past 24 hours, including the CEO of ArcelorMittal, the owner of Dofasco's operations in Ontario. 'I'm willing to have these conversations with these decision makers, because we need to make sure to be there as a government to ultimately protect the jobs,' she said. Algoma's CEO also wants to see the government put back in place substantially all its retaliatory tariffs. In March after Mr. Trump levelled the initial 25-per-cent tariffs, Ottawa imposed the same 25-per-cent duties on imports of steel and steel products into Canada from the U.S. But the government subsequently relaxed many of the tariffs levelled on the Americans after it was overwhelmed with applications for exemptions.
Calgary Herald
6 days ago
- Business
- Calgary Herald
Carney hints retaliation is coming for Trump's latest steel and aluminum tariffs
Article content OTTAWA — Prime Minister Mark Carney said his government will take 'some time but not much' to respond to U.S. President Donald Trump's 50 per cent tariffs on Canadian steel and aluminum that came into force today. Article content 'The latest tariffs on steel and aluminum are unjustified, they're illegal, they're bad for American workers, bad for American industry, and of course for Canadian industry as well,' he told reporters Wednesday morning as he was entering his caucus meeting. Article content Article content Article content Carney said Canada currently has counter-tariffs in a gross amount, before remissions, on over $90 billion of U.S. imports, and said those remain in place. But given the devastating impacts these new tariffs will have on Canadian industries, there is pressure to retaliate. Article content Article content 'We are in intensive discussions right now with the Americans on the trading relationship. Those discussions are progressing,' said Carney. Article content 'I would note that the American action is a global action, it's not one targeted at Canada, so we will take some time but not more before responding,' he added. Article content Ontario Premier Doug Ford said it was his understanding Canada is 'close to making a deal' with the U.S. but said he would still like to see retaliatory tariffs. Article content On Tuesday, Trump signed an executive ordering raising U.S. tariffs on all steel and aluminum imports from 25 per cent to 50 per cent starting at 12:01 a.m. Wednesday. Article content Article content The move deals a significant blow to a key Canadian export, with industry groups warning that steel and aluminum producers are reeling from the noticeable drop in American imports. Article content More than 90 per cent of Canada's steel and aluminum is exported to the United States, according to 2024 federal government statistics. Article content 'They are illegal. These make no sense. They're hurting the Canadian-American relationship terribly,' said Terry Sheehan, the Liberal MP for Sault Ste. Marie—Algoma which is home to Algoma Steel, of Trump's latest tariffs on steel and aluminum. Article content Sheehan said he is encouraging the government to fight back like it did in 2018, when Trump imposed a 25 per cent tariff on steel and a 10 per cent tariff on aluminum imports, to cause maximum pain for the Americans and minimum impact on Canadian industries.
