The CEO of Stelco’s U.S. parent company has declared that “we will defend ourselves” if the Canadian government pursues legal action following its announcement to halt production at a Hamilton steel mill, which could lead to as many as 500 job losses. This situation arises partially from the ongoing trade conflict between Canada and the United States.
His comments came after Prime Minister Mark Carney indicated that the federal government would “utilize all powers available” against Cleveland-Cliffs as it seeks to hold the Ohio-based firm accountable “to the fullest extent of the law.”
In a Wednesday interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves stated that Stelco’s capacity to sell steel produced in Hamilton to U.S. customers was an “essential condition” of the agreement made when the company was purchased in 2024. This includes commitments to preserve “significant employment levels in Canada” and “significant 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 capability to sell into the United States,” he stated. “That was a fundamental condition for me to acquire Stelco.”
“I would not have pursued the acquisition of Stelco if I had known that Canada and the United States would evolve into trade adversaries.”
Even with the current trade tensions, CUSMA remains operational. Although the U.S. ended discussions about renewal in July, the trilateral trade agreement is set to last until 2036.
Prime Minister Mark Carney states that Canada will ‘use all the powers that we have’ to ensure Stelco fulfills its ‘legal obligations for employment.’ The company, owned by U.S.-based Cleveland-Cliffs, announced on Monday that it plans to halt some production at its Hamilton facility, affecting hundreds of jobs.
“I believe I am operating within the limits of what I can do as a responsible business owner,” Goncalves remarked in a follow-up interview on Thursday.
He stated he will respond to Carney “in court once the lawsuit is filed against me.”
Job cuts tied to trade conflict
Stelco has explicitly connected its decision to reduce up to 500 jobs with U.S. President Donald Trump’s trade conflict with Canada.
Last year, the Trump administration imposed a 50 percent tariff on foreign steel under Section 232 of the Trade Expansion Act. In retaliation, Canada has enacted duties on various U.S.-made steel products.
During a press conference on Tuesday, Carney specifically criticized Goncalves for “applauding” Trump’s decision to implement harsh tariffs on Canadian steel imports into the U.S.
Goncalves has claimed that his support for Trump does not conflict with his commitment to supporting steel workers in Canada.
“America first does not mean America only,” he asserted on Wednesday. “Canadians should understand that individuals like me who invest in Canada are not doing so to undermine them. We are here because we have faith in the country, its people, and its workforce.”
Cleveland-Cliffs finalized its acquisition of Stelco in a $3.4 billion cash-and-stock transaction that was completed in November 2024. In a statement announcing the acquisition, Stelco’s then-CEO Alan Kestenbaum emphasized that the deal “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 its intention to idle part of its Hamilton operations. (Patrick Morrell/CBC)
Insufficient orders?
Goncalves pointed out that foreign steel imports into Canada are exerting pressure on the market for Stelco’s cold-rolled steel production.
“We do not have a market that can accommodate all participants, especially the two major players, Stelco and ArcelorMittal Dofasco, along with substantial quantities of imported steel entering the market, and sell that altogether in the Canadian domestic sector.
“Thus, we have opted to focus on hot-rolled products.”
When questioned about whether Stelco was declining orders, Goncalves responded that there were no orders: “We cannot turn down something that does not exist.”
However, a source within Stelco informed CBC News that there are customers ready to place orders. Another industry insider noted that Canada’s steel sector continues to receive orders for flat-rolled galvanized steel. CBC News has chosen not to disclose these sources due to concerns regarding their respective employers.
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Analysis
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‘It’s devastating’: Hundreds of Stelco workers in Hamilton and Nanticoke face uncertain future due to layoffs
Goncalves clarified on Thursday that he meant “there are not enough orders at a price point that makes sense for a business to operate.”
Carney has mentioned that there is “money on the table” to assist companies like Stelco in mitigating the effects of the ongoing trade conflict, but Goncalves maintains that this is not the solution his company requires.
“The issue is not a shortage of funds. It is not as if Stelco is running low on cash,” he said, reiterating that the main concern is the uncertainty surrounding Canada-U.S. trade. “No amount of money could resolve that.”