'No question' – Trump's steel tariffs seen hurting Algoma

Sault Ste. Marie is reeling after being rabbit-punched Thursday by the leader of our biggest and closest trading partner, the United States of America.

"We are dismayed by today’s announced U.S. tariff on Canadian steel products," said Kalyan Ghosh, Algoma's president and chief executive officer.

"Canadian steel does not pose a security risk to US national security. On the contrary we are among their greatest allies and a critical supplier to their defense sector," Ghosh said.

"There is no question these tariffs will have a damaging impact on Algoma, as well as on our U.S. customers with whom we have long-standing relationships, and on many within our supply chain – be they raw material suppliers or providers of transportation services."

The steel mill CEO was grateful for Canadian retaliatory measures announced this afternoon against U.S. steel exported to Canada.

Canada buys nearly 50 per cent of U.S. steel exports.

"We only wish the steel surtax would take immediate effect as any lag will have serious market ramifications. Nevertheless, we thank the Canadian government for their continued support for Canadian steel and acknowledge the actions they have already taken to strengthen regulatory measures to prevent circumvention and transshipments."

"We remain optimistic that this situation will be short-lived as the cost to the North American economy will be significant," Ghosh said.

Mayor Christian Provenzano said he's "seriously concerned" about how the tariff will affect Sault Ste. Marie and he's been talking to Sault MP Terry Sheehan about the issue.

“I am  committed to continuing my advocacy in defence of Algoma and our community at large,” the mayor said in a written statement.

“The tariff on Canadian steel is terrible economic policy and it will have a detrimental impact on both Canada and the U.S. It is important for this rational, fact-based message to be recognized, and for the government of Canada to defend the steel industry and our country’s economy.”

"Canada is the top destination for U.S. steel exports and the U.S. is the top destination for Canadian steel exports. U.S. steel exports into Canada represent 30 per cent of the Canadian market, whereas Canadian steel exports into the U.S. represent only six per cent of the U.S. market. Additionally, a 2003 study of the most recent previously imposed steel tariffs found that $4 billion in lost wages and 200,000 jobs losses occurred in the U.S., with the cause attributed to steel prices," the mayor said.

Prime Minister Justin Trudeau was clearly agitated when he announced retaliatory measures against the Trump administration's tariff decision.

“For 150 years, Canada has been America's most steadfast ally,” Trudeau said.

"Canadians have served alongside Americans in two world wars and in Korea. From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together."

“Canadian personnel are serving alongside Americans at this very moment. We are partners in NORAD, NATO, and around the world. We came to America's aid after 9/11 – as Americans have come to our aid in the past. We are fighting together against Daesh in Northern Iraq."

Trudeau pointed out that United States has a US$2 billion surplus in steel trade with Canada, and that Canada buys more American steel than any other country in the world, accounting for half of all U.S. steel exports.

"Canada is a secure supplier of aluminum and steel to the U.S. defence industry, putting aluminum in American planes and steel in American tanks. That Canada could be considered a national security threat to the United States is inconceivable."

“The government of Canada is confident that shared values, geography and common interests will ultimately overcome protectionism," Trudeau said.

At the University of Michigan's Ross School of Business in Ann Arbor, Saultite Kai Petainen argues that President Trump is hurting his own nation by imposing a 25 per cent tariff on Canadian steel.

"The USA uses Canadian steel for not only building infrastructure, but it’s also used for the automobile industry and national security/defense," Petainen tells SooToday.

"This will hurt American jobs and it will make it much more expensive for the government to pay for equipment in the military. From a cost perspective, this will hurt the American military."

"The president is making bold plans and he either hasn’t thought through his actions, or he doesn’t care for Canadian jobs, or even American jobs for that matter. This will not only hurt Canadian cities that lie along the US border, but it will hurt American cities as well," said Petainen, who manages his school's Tozzi Trading Floor.

"A 25 per cent tariff on steel imports into the United States will absolutely affect the future viability of Algoma," said Sault MPP Ross Romano.

"Until Prime Minister Trudeau and the federal Liberal government enact similarly strong measures to ensure fairness and balance in steel markets, we will be at a huge competitive disadvantage that we will not be able to recuperate from."

"While other countries like the USA and China are putting up walls and barriers to steel imports, Canada continues to allow our marketplace to be porous, further weakening our ability to compete in the world markets," Romano said.

Sault MP Terry Sheehan met Thursday with Prime Minister Trudeau and thanked him for what Sheehan described as "his swift action in support of steel workers in the Sault and across Canada, as well as our aluminum workers."

"We will always stand up for our workers," Sheehan said. "We are implementing strong retaliatory measures to this attack on our industry."

"It is simply ridiculous to view any trade with Canada as a national security threat to the U.S. and we will continue to stand up for Canadian workers and Canadian businesses."

"I am committed to continue to fight for the steel industry along with the prime minister, Minister Freeland, Algoma, Tenaris, United Steel Workers, Sault Ste. Marie Chamber of Commerce, the community and all others in government, to protect the steel industry."

As co-chair of the all-party steel caucus in Ottawa, Sheehan called for a meeting next week to discuss the Canadian countermeasures.