President Donald Trump’s metals tariffs, which he recently doubled, are taking their toll on the industry.Jonas Walzberg/Reuters
ArcelorMittal is laying off steelworkers in Hamilton as part of a restructuring plan as the multinational steelmaker grapples with punishing metals tariffs imposed by U.S. President Donald Trump.
In a news release on Wednesday, ArcelorMittal Long Products Canada said it is shutting down its Hamilton wire drawing mill permanently and consolidating its operations in Montreal, leading to the loss of 153 jobs.
Stephane Brochu, CEO of AMLPC, said in the release that the restructuring is necessary to ensure the sustainability of the company’s wire drawing business.
“It will allow us to improve our operational efficiency and secure our long-term competitiveness in the demanding wire drawing market,” he said.
Wire drawing is a steel-making process that uses dies to reduce the diameter of wire and increase its length. AMLPC’S wire is used in the telecommunications, construction and automotive industries.
Luxembourg-based ArcelorMittal employs nearly 10,000 people in Canada, with 2,000 working for AMLPC. ArcelorMittal also owns the massive Dofasco steel-making operations in Hamilton.
The Canadian steel industry is being pummeled by 50-per-cent tariffs imposed last week by Mr. Trump, who doubled the duties from the already punishing 25-per-cent put in place in March.
Mr. Trump has justified the tariffs on national security grounds, saying that his objective is to rebuild the American steel industry and bring back thousands of jobs that have been lost to what he claims is unfair foreign dumping of steel into the U.S. Dumping is the practice of foreign steel mills selling below the cost of production to gain market share.
Industry Minister Mélanie Joly told The Globe and Mail last week that the federal government is providing funding on a case-by case basis to Canadian companies to try to protect jobs that are at risk because of the trade war.
Loans are available for the next 12 months through Ottawa’s Large Enterprise Tariff Loan facility for affected companies. The program is open to big Canadian employers with annual revenue of approximately $300-million that are in need of loans of least $60-million.
AMPLC declined to answer whether it has attempted to access emergency government funding.
The decision to close the Hamilton site “has not been made lightly and comes after much consideration of all possible alternatives.” said Jean-Philippe Grou, director of communications at AMLPC, in an e-mail to The Globe.
The Canadian steel industry has announced other layoffs in the past few weeks.
Algoma Steel Group Inc. recently said it is planning to lay off 35 people. The Sault Ste. Marie, Ont.-based steel producer told The Globe last week that the 50-per-cent tariffs make it unviable in the U.S., barring a massive run-up in the price of steel.
About half of the company’s revenue comes from the U.S. market. Algoma has been trying to win more business in the domestic market to make up for those losses. But Algoma and other Canadian steelmakers have argued that dumping of cheap foreign steel into Canada is making it extremely difficult for domestic mills to compete. Algoma has asked Ottawa to impose import tariffs on a whole host of countries, including South Korea, Malaysia, India, Vietnam and Turkey.
Ms. Joly told The Globe last week that the government is planning to soon address the dumping of foreign steel into Canada but did not offer details.
Ottawa already imposed 25-per-cent tariffs on steel from China last year to target what former prime minister Justin Trudeau called “unfair” trade practices.
Not all Canadian steel industry stakeholders are in favour of putting new tariffs on foreign countries.
Jim Ritchie, the owner of Vancouver-based steel distribution company Cascadia Metals Ltd., said those tariffs would increase his costs and punish his 4,000 customers across Canada. Cascadia buys steel from both Canadian mills and overseas producers.