The CEO of Stelco’s American parent company asserts that he is legally entitled to halt production at a steel mill in Hamilton, Ontario, leading to the potential layoff of up to 500 employees, citing the ongoing trade tensions between Canada and the United States. This statement comes in response to Prime Minister Mark Carney’s declaration that the Canadian government will leverage all available measures against Cleveland-Cliffs, urging full legal action against the company.
During an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized that Stelco’s capacity to freely distribute steel produced in Hamilton to American markets was a fundamental condition agreed upon during the company’s acquisition in 2024. These conditions included maintaining substantial workforce levels in Canada and significant operations in Hamilton.
Goncalves highlighted the importance of being able to sell into the U.S. market under the United States-Mexico-Canada Agreement (USMCA) and expressed regret over the deterioration of trade relations between Canada and the U.S., citing that he would not have acquired Stelco had he foreseen the current trade tensions.
The decision to cut up to 500 jobs at Stelco, a subsidiary of Cleveland-Cliffs, was directly linked to the trade dispute between President Donald Trump’s administration and Canada. The implementation of 50% tariffs on foreign steel by the U.S. government, in response to which Canada imposed tariffs on various American steel products, exacerbated the situation.
Carney criticized Goncalves for supporting Trump’s tariff actions and expressed disappointment over the layoffs at Stelco. In response, Goncalves defended his stance, emphasizing the challenges posed by foreign steel imports in the Canadian market, leading to the strategic shift towards focusing on hot-rolled products.
Despite claims that there are customers waiting to place orders, Goncalves stated that the decision was based on the absence of actual orders rather than turning down existing demands. The CEO contended that the root issue lies in the absence of a firm trade agreement between Canada and the U.S., asserting that financial assistance from the government is not the solution to the ongoing trade uncertainties.
Cleveland-Cliffs acquired Stelco in a multi-billion-dollar deal, with a commitment to prioritizing national interests and recognizing the importance of the workforce. Prime Minister Carney reiterated the government’s willingness to support companies like Stelco financially amidst the trade challenges. However, Goncalves emphasized that the core issue remains the lack of a definitive Canada-U.S. trade agreement, indicating that monetary aid alone cannot address the underlying problem.