A representative from the national steel producers association said any Canadian company that sells more than 50 per cent of its steel to the United States will be in deep trouble due to the American tariffs introduced this week.
“In many cases, a lot of our producers export 50 per cent of their production to the U.S., so they're highly exposed,” said Francois Desmarais, vice-president of trade and industry affairs with the Canadian Steel Producers Association.
Algoma Steel sells roughly half of its steel to the U.S. That may change due to the new 50-per-cent tariffs and Canada’s plans to use Canadian steel for building projects and armoured vehicles.
Desmarais said roughly 600 jobs have been lost in Canada since President Donald Trump instituted the 25-per-cent tariff on steel and aluminum in March.
“Even at 25 per cent, we were already feeling the impact. Orderbooks are melting. In April for the full first month under 25 per cent, our export to the U.S. dropped by 28 per cent,” he said.
If Canada wants to be taken seriously by the U.S., the government needs to reinstitute the 25-per-cent tariff on American steel and aluminum that it paused in April, the association said.
Then the government should bump that number up to 50 per cent.
“We need to match exactly what was imposed on us,” Desmarais said.
Unlike many other Canadian companies, several steel producers here are the importers of record into the U.S., which means they are responsible for paying the tariff when they send steel to American companies.
After the steel company pays the tariff, then it all depends on the company’s arrangement with its customers.
“I can tell you that we've paid millions but our customers in the U.S. also were impacted in some of those costs,” Desmarais said.
Another issue has been the dumping of cheap steel into Canada from other countries has reduced the number of Canadian customers that rely on steel made here.
“I think the government needs to step in and stop other countries from being able to dump steel at a reduced price,” said Bill Slater, president of United Steelworkers Local 2724, the union for roughly 500 workers at Algoma Steel, earlier this week.
“You know we've had a system in the past where we would take these cases to Ottawa and basically go through judicial proceedings to see if it was legitimate dumping or not.
"But that process takes too long. The government needs to step up and make faster decisions on out-of-country steel coming into our country,” he said.
Today The Globe and Mail reported Industry Minister Mélanie Joly has signalled a crackdown on dumping of cheap foreign steel into Canada is on the way.
This week Algoma Steel and Tenaris have been in meetings with the federal government to see how the government will respond to the American tariffs.
Michael Garcia, Algoma Steel's CEO, and Martin Castro, Tenaris President for Canada, have been in Ottawa at those meetings along with representatives from the unions.
"We are hopeful that the discussions with the government will make progress on the steps to defend our domestic market from imports at this challenging time," said Jessica Tett, communications manager at Tenaris, via email yesterday.
SooToday has reached out to Algoma Steel, Tenaris, and MP Terry Sheehan for comment on this story.