The CEO of the American parent company of Stelco asserts his legal authority to halt production at a steel mill in Hamilton, Ont., leading to around 500 job losses, citing 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 leverage all available mechanisms against Cleveland-Cliffs to enforce legal actions to the fullest extent.
During an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized the importance of Stelco’s capacity to freely market steel produced in Hamilton to U.S. consumers as a fundamental condition agreed upon during the company’s acquisition in 2024. These terms included sustaining substantial employment levels in Canada and maintaining significant operations in Hamilton.
Goncalves highlighted the significance of being able to sell into the U.S., mentioning that it was a pivotal factor for his acquisition of Stelco. He expressed that the current state of trade relations between Canada and the U.S. was unforeseeable at the time of the acquisition, and he would not have proceeded if he had anticipated the adversarial trade environment.
Stelco, under the ownership of Cleveland-Cliffs based in Ohio, directly attributed its plan to lay off up to 500 employees to the trade dispute instigated by U.S. President Donald Trump against Canada. The Trump administration had imposed steep tariffs of 50% on foreign steel under Section 232 of the Trade Expansion Act last year, prompting retaliatory duties from Canada on various U.S.-made steel products.
In response to Carney’s criticism of Goncalves for supporting Trump’s tariffs, the CEO clarified that his endorsement of the U.S. president’s actions did not conflict with his advocacy for Canadian steelworkers. He also mentioned that he had not been formally notified of any legal action from the Canadian government.
Goncalves reiterated that his loyalty to the U.S. did not imply disregard for Canadian interests, emphasizing his commitment to investing in Canada out of belief in the country, its people, and its workforce. The acquisition of Hamilton-based Stelco by Cleveland-Cliffs in a $3.4 billion deal in November 2024 was positioned to prioritize national interests and acknowledge the importance of the workforce, as stated by Stelco’s former CEO Alan Kestenbaum.
Carney expressed disappointment over Stelco’s decision to lay off workers amid the temporary suspension of cold-rolled steel production in Hamilton. Goncalves justified the move by citing the pressure exerted on Stelco by imports of foreign steel into Canada, tightening the domestic market conditions.
The CEO explained that market constraints compelled the company to focus on hot-rolled products due to the inability to accommodate all participants in the market, particularly with imported steel competing in the Canadian domestic market. In response to queries about rejecting orders, Goncalves clarified that there were no existing orders to decline.
While sources within Stelco indicated interest from customers to place orders, another industry insider noted that the Canadian steel industry, in general, continues to receive orders for flat-rolled galvanized steel. Despite financial support offered by the federal government to mitigate the impact of the trade war, Goncalves stated that the issue at hand was not a lack of funds but the absence of a definitive Canada-U.S. trade agreement.