In Sault Ste. Marie where Algoma Steel is a big employer, Trump tariffs feel like a bad 'déjà vu,' mayor says
CEO says Algoma will follow developments 'to understand the full impact on our order book' in North America
New U.S. tariffs announced Monday by President Donald Trump are creating uncertainty and disruptions in Sault Ste. Marie, Ont., home of major Canadian producer Algoma Steel.
"Fifty per cent of our steel goes to the U.S., so that's way, way too much of our product to not eventually cause a slowdown in production," said Bill Slater, head United Steelworkers Local 2724, which represents some of the company's 2,700 workers in the border city.
Trump signed two executive orders late Monday that would place 25 per cent tariffs on all steel and aluminum imports entering the U.S., including from its biggest supplier, Canada, effective March 12. The move comes a week after promised U.S. tariffs on all goods from Canada and Mexico were put on hold for 30 days as the parties continue talks.
Prime Minister Justin Trudeau has said Canada's government will work with the Trump administration over the coming weeks to ensure it understands the impact the levies would have on the U.S. and Canada. When asked by CBC News if he would reciprocate with matching tariffs on aluminum and steel, Trudeau said he hopes that doesn't have to happen, but, "If it comes to that, our response, of course, will be firm and clear."
Speaking from his office in Sault Ste. Marie, Algoma CEO Michael Garcia told CBC News on Tuesday that it's important for Canada "to act quickly."
"I do think that any tariffs they collect will also need to flow back to the workers and the companies affected by this change in the market, and I think if the government can do that, Algoma Steel and other members of the Canadian steel industry have a chance to weather the intense short-term storm."
It's the second time Canada's steel and aluminum industries have been on Trump's tariffs radar.
In March 2018, during his first term as president, he imposed steel and aluminum tariffs at 25 per cent and 10 per cent, respectively, using national security as justification. Canada then placed a series of counter-tariffs on American products like Florida orange juice.
In May 2019, the White House announced a deal to prevent "surges" in the steel and aluminum supplies from Canada and Mexico, ending the trade dispute.
Americans also work at Algoma, union rep says
Founded in 1901, Algoma Steel says it's now one of North American's leading manufacturers of hot- and cold-rolled steel sheet and plate products, and is the largest employer in Sault Ste. Marie, which has a population of around 72,000.
It's also one of the Canadian Steel Producers Association's (CPSA) 15 member companies. Annually, the CPSA says, its members produce 13 million tonnes of primary steel and pipe and tube products each year, and domestic steel operations directly employ some 23,000 Canadians and support 100,000 indirect jobs.
Our plan is to follow the developments closely, to understand what customers it will still make sense for us to hold on to and continue to service, because they want our steel.- Michael Garcia, CEO, Algoma Steel
Slater said Algoma Steel sells a lot of its products to the U.S.
Situated along the banks of the St. Marys River, the city is an international port of entry to the U.S.
Trump's planned tariffs, Slater said, could change the way some people might feel about their neighbours across the river, in Sault Ste. Marie, Mich. He also noted that a number of people who work at the Canadian plant commute from the U.S. side.
"Unfortunately, it's not all the Americans that are making this decision, but I think that's it's really affecting the relationship, and we are a border city, so that's, you know, it's always been a good relationship and that's gonna end."
Reliving the 'horrors of the past'
Sault Ste. Marie Mayor Matthew Shoemaker told CBC Radio's Up North he feels like this is "deja vu" for his city.
"We experienced these tariffs in 2018-19 during the first Trump term, and we are reliving the, what I would call,. the 'horrors of the past' with the new announcement. So we are, as a community, hunkering down for some difficult economic times," said Shoemaker.
Shoemaker said that during the last tariffs in 2018-2019, the Algoma Steel's lower revenues affected the local economy.
"It was millions, multiple millions of dollars out of their bottom line, which meant that that was multiple millions of dollars not circulating in the local economy, not being spent on local contractors, not being spent on local restaurants and not being spent on improvements to the steel mill."
When it comes to continuing talks with the U.S., Garcia said the Canadian government "needs to continue to listen very closely to what the United States is using as a justification for the tariffs."
"That's what neighbours and close allies should always do, and I think that dialogue needs to continue up until the very moment the tariffs are in effect."
As for what Algoma Steel plans to do next, Garcia said: "Our plan is to follow the developments closely, to understand what customers it will still make sense for us to hold on to and continue to service, because they want our steel.
"So we're turning our eye to the Canadian market and other markets" and looking "to understand the full impact on our order book throughout North America."