Prime Minister Mark Carney accused the American parent of Stelco of betraying Canadian workers on Tuesday, after the steelmaker announced layoffs tied in part to tariffs imposed by U.S. President Donald Trump. Stelco is a subsidiary of Ohio-based Cleveland-Cliffs.
Carney directly criticized Cleveland-Cliffs CEO Lourenco Goncalves, pointing out that Goncalves had publicly supported Trump’s 50% steel tariffs, calling them “a necessary step” to protect American steelmakers. “Our thoughts are with the workers and the families who have been betrayed by the company,” Carney said.
Stelco said as many as 500 workers could be affected as it indefinitely idles cold-rolled and coated operations at its Hamilton, Ontario, plant, shifting production to its Lake Erie facility in Nanticoke, Ontario. Cleveland-Cliffs said the move would not shift steel production out of Canada, stating that output would be concentrated at the Lake Erie Works plant, where it expects to absorb a significant number of the affected Hamilton employees, with overall steel tonnage remaining unchanged.
Demand Decline Cited By Company
In a memo to employees, Stelco said U.S. tariffs had “significantly shrunk the market” for its cold-rolled and galvanized products. The company said demand in the markets it traditionally serves fell almost 25% in the second quarter compared with the 2024 quarterly average, including a 10% decline within Canada itself.
The layoffs come amid an escalating trade dispute between Canada and the United States, with Washington having imposed 50% tariffs on Canadian steel and other goods, and Ottawa responding with its own retaliatory tariffs. The announcement followed a White House event a day earlier where Trump touted a new $15 billion steel plant being built in Iowa, saying his tariffs had reduced foreign steel imports and drawn investment into the U.S., with companies building plants there “because they don’t want to pay tariffs.”
Legal Obligations Under Scrutiny
Carney said his government has legal options tied to the terms under which Cleveland-Cliffs’ takeover of Stelco was approved. The Canadian government cleared the C$3.4 billion ($2.4 billion) acquisition in October 2024 on the condition that Cleveland-Cliffs meet legally binding five-year employment commitments, including maintaining at least the same number of unionized workers and the vast majority of nonunion staff.
“The company made representations and has legal obligations for employment,” Carney said. “We intend to use all powers that we have and pursue them to the fullest extent of the law.” He added that the federal government had offered financial assistance intended to preserve jobs, though he did not disclose the amount or terms of that offer.
Cleveland-Cliffs did not immediately respond to a request for comment on Carney’s remarks. The dispute adds another flashpoint to the broader Canada-U.S. trade conflict over steel, as the future of Stelco’s workforce and the company’s takeover commitments remain unresolved.
This article references reporting from:
