Steel tariffs of 50% could spark ‘economic depression,’ Sault mayor warns

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The announcement that the U.S. is imposing a 50 per cent tariff on steel and aluminum exports could spell disaster for Sault Ste. Marie, Mayor Matthew Shoemaker said Monday.

American President Donald Trump made the sudden decision Friday, doubling the 25 per cent tariff he imposed earlier this year.

Shoemaker said they were working to deal with that smaller tariff when Trump escalated his trade war.

“My first reaction was definitely shock,” the mayor said.

“At 50 per cent, it’s a completely different recipe. It’s not that the problem is twice as big. It’s that the problem is 10 times as big.”

Shoemaker said he’s pushing the federal government to come up with an “immediate action plan” to support workers at Algoma Steel, the community’s largest employer.

“The steel plant ships, I think, 55 to 60 per cent of its materials to the U.S.,” he said.

Customer base would ‘evaporate’

“That customer base is going to evaporate if they have to pay 50 per cent more for their steel ... Without direct support from the government for the workers and for the industry, there’s the risk of creating a severe economic depression in our community.”

Trump made the announcement May 30 at a U.S. Steel facility in West Mifflin, Penn.

To an applauding crowd of U.S. Steel employees, Trump said he would jack up the tariff to protect America’s steelworkers.

“We are going to be imposing a 25 per cent increase,” Trump said.

“We’re going to bring it from 25 per cent to 50 per cent, the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States. Nobody’s going to get around that.”

He said the move would come into effect Wednesday of this week.

Sault MP Terry Sheehan said Trump’s move is almost “beyond belief.”

“Well, 25 per cent is unacceptable to begin with,” Sheehan said.

“It’s illegal. It’s unjust – 50 per cent beyond belief. It’s beyond preposterous.”

Quick action needed

A statement from Algoma Steel said quick action is vital.

“The Algoma Team remains in close consultation with our customers and the government regarding the challenges this presents to our business,” the statement said.

“Algoma is advocating for swift government action to support Algoma and the Canadian Steel Industry during this volatile time.”

The speed of the new tariff means Canada has to respond quickly, Shoemaker said.

“We don’t have the luxury of that amount of time,” he said.

“We need an action plan within the next 7-10 days.”

Specifically, Algoma Steel needs assurances that the Department of Defence will be buying from Canadian producers, and that new infrastructure projects will use domestic steel.

“Whether that’s contracts, or whether that supports for workers or whether that’s, you know, direct injections of capital into their facility,” Shoemaker said.

“Those numbers need to be worked out by the steel plants themselves. Really, I want to make sure that the federal government and the provincial government, that they understand that there is no time to waste here. That this is pressing and that without it, the Sault is going to be left withering on the vine.”

Later Monday, United Steelworkers said it welcomed news that the federal government would require Canadian steel and aluminum in national infrastructure and defence projects.

“Canada has the tools to defend and grow good jobs — it just takes the will to use them,” said the union, which represents 225,000 people in Canada, including at Algoma Steel.

“Today’s news could mark a turning point — and we hope it’s just the beginning.”

Shoemaker and Sheehan said workers should know that everything is on the table when it comes to protecting the industry.

“We’re going to continue to have their backs and I’ll work night and day on this issue,” Sheehan said.

“I have meetings lined up this week here in Ottawa on the very subject. And we’re going to continue to fight tooth and nail for the workers that make northern Ontario so great.”

He said Prime Minister Mark Carney is in Saskatchewan to “tear down provincial trade barriers” and to fast-track projects that use Canadian steel and aluminum.