The CEO of the American parent company of Stelco has stated that they will take legal action to defend themselves if Ottawa pursues a lawsuit following their decision to halt production at a steel mill in Hamilton, leading to potential layoffs of up to 500 employees. This move is attributed in part to the ongoing trade tensions between Canada and the U.S.

These statements come in response to Prime Minister Mark Carney’s assertion that Ottawa will utilize all available legal measures against Cleveland-Cliffs as it seeks to hold the Ohio-based company accountable to the fullest extent of the law.

In an interview with CBC News, Cleveland-Cliffs CEO Lourenco Goncalves emphasized that Stelco’s ability to freely sell steel produced in Hamilton to U.S. buyers was a crucial condition of the acquisition agreement made in 2024. This agreement included commitments to maintain substantial employment levels in Canada and significant operations in Hamilton, with the Canada-U.S.-Mexico Agreement (CUSMA) already in effect at the time of the purchase.

Goncalves clarified that the ability to sell into the U.S. market was a fundamental requirement for acquiring Stelco, expressing regret over the deterioration of trade relations between Canada and the U.S. since the acquisition.

Despite the ongoing trade dispute, CUSMA remains valid until 2036, even though talks on its renewal were halted by the U.S. in July.

Regarding the planned layoffs, Stelco has directly linked the decision to cut jobs to the trade conflict initiated by U.S. President Donald Trump, who imposed significant tariffs on foreign steel under Section 232 of the Trade Expansion Act last year, prompting retaliatory duties from Canada.

Carney criticized Goncalves for supporting Trump’s tariff policies, but Goncalves defended his position, emphasizing that his investments in Canada are driven by a belief in the country, its people, and its workforce.

Goncalves highlighted that foreign steel imports to Canada have strained the market for Stelco’s cold-rolled steel production, leading to a shift towards focusing on hot-rolled products due to market pressures.

While questions arose about Stelco turning down potential orders, Goncalves clarified that there were no orders to reject, citing the challenging market conditions. Carney has suggested financial support to mitigate the trade war’s impact, but Goncalves emphasized that the core issue lies in the uncertainty surrounding Canada-U.S. trade, stating that financial aid alone cannot resolve the situation.