Algoma Steel's facility in Sault Ste. Marie, Ont. Donald Trump's supercharged tariff threatens the viability of the entire Canadian steel industry. About half of the 12 million tonnes of steel produced in Canada every year is sent to the U.S., but the business case has evaporated.Sean Kilpatrick/The Canadian Press
Algoma Steel Group Inc. ASTL-T chief executive Michael Garcia is calling on Ottawa to immediately bring in tariffs on imports of foreign steel into Canada to protect the industry in the face of tremendous pressure being exerted by U.S. President Donald Trump’s trade war.
As of Wednesday morning, Mr. Trump doubled the tariff on almost all foreign steel being imported into the U.S. to 50 per cent, including everything from Canada.
The supercharged tariff threatens the viability of the entire Canadian steel industry. About half of the 12 million tonnes of steel produced in Canada every year is sent to the U.S., but the business case has evaporated.
Mr. Garcia said in an interview that unless the price of steel skyrockets, the company’s U.S. business isn’t viable anymore.
“I am advocating for Section 53 tariffs not as a retaliatory measure against the U.S., but as a prudent move to protect a vital strategic industry,” he said in an interview.
Under Canada’s Customs Tariff law, section 53 tariffs can be imposed by Ottawa in cases where unfair trade practices are occurring that is harming domestic trade.
Section 53 tariffs on foreign imports into Canada of steel coil and plate will address the long-standing dumping problem that sees mills from countries such as Turkey, Vietnam and the Middle East selling the metal at artificially low prices in order to gain market share in Canada, Mr. Garcia said.
Addressing dumping will allow Algoma to win more business in its home market and potentially make up for some of the revenue it is losing in the U.S.
“They could do it very fast and that would have an immediate positive effect for the Canadian steel industry,” said Mr. Garcia of the impact of section 53 tariffs.
“It would also be seen very favorably by the U.S.”
Mr. Trump on Tuesday in his executive order said a major motivation behind jacking up the steel tariffs was addressing dumping by foreign producers that was still occurring in the U.S. market.
Barry Zekelman, the CEO of Chicago-based Zekelman Industries, the largest independent steel pipe and tube manufacturer in North America, told The Globe and Mail on Tuesday that Mr. Trump is clearly sending a message to Ottawa that dumping is a huge problem in this country that must be fixed.
Mr. Garcia spoke with Industry Minister Mélanie Joly earlier on Wednesday and Finance Minister François-Philippe Champagne about the need to take urgent action.
But for now Ottawa is not taking any immediate steps on dumping or retaliatory tariffs.
Prime Minister Mark Carney on Wednesday said Canada will not immediately fight back in the face of the higher tariffs on both steel and aluminum.
“We will take some time, not much, some time, because we are in intensive discussions right now with the Americans on the trading relationship,” he said before a caucus meeting Wednesday.
Ms. Joly at a media availability later on Wednesday in Ottawa said she had talked with about 10 steel and aluminum CEOs over the past 24 hours, including a meeting alongside Mr. Carney with the CEO of ArcelorMittal, the owner of Dofasco’s operations in Ontario.
“I’m willing to have these conversations with these decision makers, because we need to make sure to be there as a government to ultimately protect the jobs,” she said.
Algoma’s CEO also wants to see the government put back in place substantially all its retaliatory tariffs.
In March after Mr. Trump levelled the initial 25-per-cent tariffs, Ottawa imposed the same 25-per-cent duties on imports of steel and steel products into Canada from the U.S.
But the government subsequently relaxed many of the tariffs levelled on the Americans after it was overwhelmed with applications for exemptions.