4 days ago
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.
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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.
