The CEO of Stelco’s American parent firm has stated that “we will defend ourselves” if the Canadian government proceeds with legal action following its announcement to halt operations at a steel mill in Hamilton, which could lead to as many as 500 job losses, largely attributed to the ongoing trade conflict between Canada and the United States.
These comments come in response to Prime Minister Mark Carney’s statement indicating that Ottawa will “utilize all resources available” against Cleveland-Cliffs as it seeks legal remedies to address the situation.
In a Wednesday interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized that the ability for Stelco to sell steel produced in Hamilton to U.S. markets was a fundamental condition of the agreement made when the company was purchased in 2024. This arrangement includes commitments to sustain “significant employment levels in Canada” and “substantial operations in Hamilton.”
Goncalves noted that the Canada-U.S.-Mexico Agreement (CUSMA) was already in effect at the time of the acquisition.
“We had the ability to sell into the United States,” he remarked. “That was a fundamental condition for me to acquire Stelco.”
“I would not have made the acquisition if I had known that the trade relationship between Canada and the United States would deteriorate to this extent,” he added.
Despite the ongoing trade dispute, CUSMA is still active. Although the U.S. ceased discussions regarding a renewal in July, the trilateral trade agreement remains in effect until 2036.
“I believe that I am operating within the limits of what I can do as a responsible business owner,” Goncalves stated in a follow-up interview on Thursday.
He indicated that he would respond to Carney “in court once the lawsuit is filed.”
Job cuts associated with trade conflict
Stelco has directly connected its decision to reduce its workforce by up to 500 employees to the trade war initiated by U.S. President Donald Trump with Canada.
The Trump administration implemented 50 percent tariffs on foreign steel under Section 232 of the Trade Expansion Act last year, prompting Canada to retaliate with tariffs on various U.S.-made steel products.
During a press conference on Tuesday, Carney criticized Goncalves for “applauding” Trump’s decision to impose harsh tariffs on Canadian steel imports to the United States.
Goncalves has maintained that his support for Trump does not conflict with his commitment to steel workers in Canada.
“America first does not mean America only,” he stated on Wednesday. “Canadians should realize that investors like me who put money into Canada are not looking to harm them. We are here because we have faith in the country, the people, and the workforce.”
Cleveland-Cliffs completed the acquisition of Stelco in a $3.4 billion cash-and-stock transaction that was finalized in November 2024. In a press release announcing the deal, Stelco’s then-CEO Alan Kestenbaum noted that the transaction “keeps national interests at the forefront and acknowledges the significance of the workforce.”
An aerial view of the Stelco Hamilton Works production facility. Stelco Holdings Inc. announced on Monday that it intends to cease part of its operations at the Hamilton plant. (Patrick Morrell/CBC)
Lack of orders or insufficient demand?
Goncalves pointed out that foreign steel imports into Canada have created challenges for the market for Stelco’s cold-rolled steel products.
“We do not have a market that can handle all the players in the industry, primarily the two major ones, Stelco and ArcelorMittal Dofasco, along with a significant volume of imported steel coming through the borders, and sell that collectively in the Canadian domestic market.”
“Thus, we have decided to focus on hot-rolled products.”
When questioned about whether Stelco was declining orders, Goncalves asserted that there were no orders to reject: “We cannot turn down something that does not exist.”
However, a source within Stelco informed CBC News that the company has clients eager to place orders. Another industry insider mentioned that Canada’s steel sector continues to receive orders for flat-rolled galvanized steel. CBC News has chosen not to identify these sources due to concerns related to their employers.
-
Analysis
Trump isn’t extending CUSMA trade deal, so what happens now?
-
‘It’s devastating’: Hundreds of Stelco workers in Hamilton and Nanticoke face uncertain future due to layoffs
On Thursday, Goncalves clarified that he meant “there are not enough orders at a price point that makes it feasible for a business to operate.”
Carney has indicated that there is “money on the table” to assist firms like Stelco in mitigating the effects of the ongoing trade conflict, but Goncalves contends that this is not what his company requires.
“The issue is not a lack of funds. It’s not as if Stelco is running low on cash,” he reiterated, emphasizing that the primary concern is the unpredictability in Canada-U.S. trade relations. “No amount of money can resolve that.”