The CEO of the American parent company of Stelco vows to defend against any potential lawsuit from Ottawa following the decision to halt production at a steel mill in Hamilton, leading to the potential layoff of 500 employees amid strained trade relations between Canada and the U.S. This statement comes in response to Prime Minister Mark Carney’s assertion that all available measures will be taken against Cleveland-Cliffs, with plans to pursue legal action against the Ohio-based company.
In an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized that the ability for Stelco to freely sell steel produced in Hamilton to U.S. buyers was a fundamental condition agreed upon during the company’s acquisition in 2024. This condition included the maintenance of substantial employment levels in Canada and significant operations in Hamilton, with the Canada-U.S.-Mexico Agreement (CUSMA) already in effect at the time of the acquisition.
Goncalves expressed regret over the deteriorating trade relationship between Canada and the U.S., highlighting the importance of being able to sell into the U.S. market as a crucial factor in acquiring Stelco. Despite the ongoing trade war, CUSMA remains valid until 2036, although discussions on its renewal were terminated by the U.S. in July.
Stelco attributed its decision to potentially lay off up to 500 workers to the repercussions of the trade war instigated by U.S. President Donald Trump, who imposed significant tariffs on foreign steel imports under Section 232 of the Trade Expansion Act. Carney criticized Goncalves for supporting Trump’s tariff measures, to which Goncalves defended his stance by asserting his commitment to supporting Canadian steelworkers.
Goncalves cited challenges arising from foreign steel imports into Canada impacting the market for Stelco’s cold-rolled steel production, leading the company to focus on hot-rolled products due to market dynamics. While there are reports of customers seeking to place orders with Stelco, Goncalves clarified that the company is facing a lack of viable orders at profitable price levels, emphasizing the uncertainty in Canada-U.S. trade relations as a key concern.
Despite offers of financial assistance from Carney to mitigate the trade war’s effects, Goncalves emphasized that the primary issue lies in the trade uncertainty between Canada and the U.S., rather than financial constraints faced by Stelco. The CEO remains resolute in his business decisions and readiness to address any legal challenges that may arise in the future.