The CEO of Stelco’s American parent company asserts that they will take legal action to defend themselves if Ottawa initiates a lawsuit following their decision to halt production at a steel mill in Hamilton, leading to potential layoffs of up to 500 employees, partly due to the ongoing trade tensions between Canada and the U.S.
This statement comes in response to Prime Minister Mark Carney’s declaration that Ottawa will utilize all available legal measures against Cleveland-Cliffs, as the Ohio-based company is pursued to the maximum extent under the law.
During an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized that Stelco’s ability to freely market steel produced in Hamilton to U.S. customers was a fundamental condition stipulated in the acquisition agreement made in 2024. This condition included maintaining substantial employment levels in Canada and significant operations in Hamilton, all of which were agreed upon when the Canada-U.S.-Mexico Agreement (CUSMA) was already in effect.
Goncalves highlighted that the ability to sell steel in the U.S. was a crucial factor in acquiring Stelco and expressed regret over the strained trade relations between Canada and the U.S., stating that such circumstances were unforeseen at the time of the acquisition.
Despite the ongoing trade disputes, CUSMA remains in place until 2036, even though talks on its renewal were halted by the U.S. in July.
Regarding the layoffs at Stelco, the company directly attributed its decision to potentially cut 500 jobs to the trade conflict initiated by U.S. President Donald Trump, who imposed significant tariffs on foreign steel under Section 232 of the Trade Expansion Act, prompting retaliatory duties from Canada.
Goncalves defended his support for Trump’s tariffs, emphasizing that investing in Canada was a sign of belief in the country, its people, and the workforce, despite the current challenges in the steel market.
Goncalves also mentioned that due to pressure from foreign steel imports in Canada, Stelco had to focus on hot-rolled products instead of cold-rolled steel production, clarifying that the company was not rejecting orders but rather operating based on market demand.
While Carney suggested financial support to alleviate the impact of the trade war, Goncalves emphasized that the core issue was the uncertain trade environment between Canada and the U.S., stating that financial aid alone would not address the underlying trade challenges faced by Stelco.
The acquisition of Stelco by Cleveland-Cliffs in a multi-billion-dollar deal aimed to prioritize national interests and recognize the importance of the workforce, as stated by the former CEO at the time of the acquisition.