Cleveland-Cliffs to Idle Stelco's Hamilton Plant, Prompting Legal Threat from Ottawa
U.S. steelmaker Cleveland-Cliffs plans to halt cold-rolled steel production at its Stelco plant in Hamilton, Ontario, laying off up to 500 workers. CEO Lourenco Goncalves cited trade war tariffs and lost U.S. market access, while Prime Minister Mark Carney vowed to pursue legal action over alleged broken employment commitments.
Cleveland-Cliffs, the U.S.-based owner of Canadian steelmaker Stelco, plans to idle cold-rolled steel production at its Hamilton, Ont., plant, resulting in up to 500 layoffs. The decision has triggered a sharp dispute between the company and the Canadian federal government over the causes of the shutdown and the obligations tied to the firm's recent acquisition.
Cleveland-Cliffs acquired Stelco in a $3.4-billion cash-and-stock deal that closed in November 2024. Chief Executive Lourenco Goncalves stated he has the legal right to idle production at the Hamilton mill. He claimed that the ability to freely sell steel produced in Hamilton to U.S. buyers was an underlying condition for acquiring Stelco under the USMCA trade agreement. Goncalves pointed to the Trump administration's imposition last year of 50 per cent tariffs on foreign steel under Section 232 of the Trade Expansion Act, which prompted Canadian retaliation, as a factor that eliminated that free access.
Goncalves further argued that foreign steel imports have tightened the domestic market, making it impossible to accommodate all participants, including Stelco and ArcelorMittal Dofasco. He asserted his support for both Donald Trump and Canadian steel workers, and noted that he had not received notice of a lawsuit from the Canadian federal government.
Prime Minister Mark Carney expressed disappointment with Stelco's decision to lay off workers and halt cold-rolled steel production, noting the company had agreed to maintain significant employment levels in Canada. Carney vowed that Ottawa will use all powers available to pursue Cleveland-Cliffs to the fullest extent of the law regarding the layoffs.
A conflict has also emerged over the immediate cause of the production stoppage. While Goncalves claimed there were no orders for Stelco's products, sources inside Stelco and the industry told CBC News that customers are still placing orders for flat-rolled galvanized steel, contradicting the CEO's assertion.