'Catastrophic' job losses: Canada's steel industry trembles as Trump announces sharp tariff rise

Canada’s steel industry warned of “catastrophic” job losses, factory slowdowns and supply chain disruptions after US President Donald Trump announced a sharp increase in tariffs on imported steel and aluminium, raising them to 50 per cent.

Trump announced the tariff hike during a rally Friday (May 30) in West Mifflin, Pennsylvania, framing the decision as a way to protect American industry and touting a $15 billion partnership between Nippon Steel and US Steel. He said the tariffs would take effect Wednesday and called them a “fence” around domestic production.

The announcement comes less than a month after Canadian Prime Minister Mark Carney visited the White House in an effort to repair strained relations. Carney had hoped to reset ties that had been damaged by previous threats from Trump to impose steep tariffs and even annex Canada.

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The two leaders had signalled a willingness to renegotiate the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement during Trump’s first term and is scheduled for review next year.

Tariff increase sparks criticism, fears

The move to increase tariffs drew swift criticism from Canadian officials and industry leaders, who said the tariffs threaten to devastate a sector already under strain from earlier trade measures.

Canada is the largest foreign supplier of steel and aluminium to the United States, accounting for nearly a quarter of US steel imports in 2023 and about half of aluminium imports.

“A 25 per cent tariff is difficult, but a 50 per cent one is catastrophic,” Financial Times quoted Catherine Cobden, president of the Canadian Steel Producers Association, as saying.

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The steel industry in Canada is valued at 15 billion Canadian dollars (US$11 billion) and supports 23,000 direct jobs, along with another 100,000 indirect positions, according to the association.

“Steel tariffs at this level will create mass disruption and negative consequences across our highly integrated steel supply chains and customers on both sides of the border,” Cobden said.

Cobden said the new tariffs “essentially close the US market” to Canadian producers and will “have unrecoverable consequences.”

The Aluminium Association of Canada said it was awaiting “clearer and more formal legal confirmation” before offering a full response.

Canada’s international trade minister, Dominic LeBlanc, said the government remained “resolute” in defending its workers and industries.

“As we negotiate a new economic and security relationship with the US, Canada’s new government will stand strong to get the best deal for Canadians,” LeBlanc wrote Saturday (May 31) on X, formerly Twitter.

Golden Dome and 51st state

The latest tariff move coincided with remarks by Trump earlier in the week claiming Canada would have to pay $61 billion to participate in a proposed “Golden Dome” missile defence system. Trump said the cost would be waived if Canada joined the US as its 51st state.

A spokesperson for Carney said the prime minister “has been clear at every opportunity, including in his conversations with President Trump, that Canada is an independent, sovereign nation, and it will remain one.”
Canada responded to the new tariffs with its own set of retaliatory measures. Officials announced a “dollar-for-dollar” response targeting C$12.6 billion in US steel products, C$3 billion in aluminium, and C$14.2 billion in other goods.

Those measures, launched in March, come on top of earlier retaliatory tariffs on C$30 billion worth of US products. However, Canada eased some restrictions in April, particularly those affecting US automakers and manufacturers.

Canadian ministers and provincial leaders are scheduled to meet Monday in Saskatoon, Saskatchewan, to discuss economic diversification and strategies to reduce reliance on US trade.

“This isn’t trade policy, it’s a direct attack on Canadian industries and workers,” said Marty Warren, national director of the United Steelworkers in Canada. “Thousands of Canadian jobs are on the line, and communities that rely on steel and aluminium are being put at risk. Canada needs to respond immediately and decisively to defend workers.”

Goldy Hyder, president of the Business Council of Canada, urged caution, saying it was important “not to take the bait” and instead remain focused on renewing the USMCA.

“These moving goalposts is just a strategy to try and get Canada to give more,” Hyder said.