Carney accuses US steelmaker of betraying Canadian workers after layoffs tied to Trump tariffs

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TORONTO (AP) — Canadian Prime Minister Mark Carney accused the U.S. owner of steelmaker Stelco, a subsidiary of Cleveland-Cliffs, of betraying Canadian workers Tuesday after it announced layoffs it attributed in part to U.S. President Donald Trump’s tariffs — tariffs Cleveland-Cliffs’ chief executive has publicly championed.

Carney singled out Cleveland-Cliffs CEO Lourenco Goncalves, noting that he had applauded Trump’s steel tariffs. Goncalves has called the 50% tariffs “a necessary step” to protect U.S. steelmakers.

“Our thoughts are with the workers and the families who have been betrayed by the company,” said Carney, who noted he wanted to be blunt.

Carney also threatened legal action against Cleveland-Cliffs, saying the Ohio-based company has binding employment obligations stemming from its C$3.4 billion ($2.4 billion) takeover of Stelco in 2024.

Stelco said up to 500 workers could be affected as it indefinitely idles cold-rolled and coated operations at its Hamilton, Ontario, plant and shifts production to its Lake Erie facility in Nanticoke.

In a memo to employees, Stelco said U.S. tariffs had “significantly shrunk the market” for its cold-rolled and galvanized products. The company said demand in markets it traditionally serves fell almost 25% in the second quarter compared to the 2024 quarterly average, including a 10% decline in Canada.

The layoffs come amid an escalating Canada-U.S. trade war in which Trump has imposed 50% tariffs on Canadian steel and other goods and Canada has retaliated with tariffs of its own. At a White House event Monday announcing a new $15 billion steel plant in Iowa, Trump credited his tariffs with reducing foreign steel imports and attracting investment to the United States, saying companies were building plants there “because they don’t want to pay tariffs.”

Carney said the federal government had offered financial assistance to preserve jobs but did not disclose the amount or terms.

“There’s money on the table from the federal government,” Carney said. “The company made representations and has legal obligations for employment. We intend to use all powers that we have and pursue them to the fullest extent of the law.”

The Canadian government approved Cleveland-Cliffs’ takeover of Stelco in October 2024 on the condition that it meet legally binding five-year employment commitments, including maintaining at least the same number of unionized workers and the vast majority of nonunion employees.

Cleveland-Cliffs did not immediately respond to a request for comment on Carney’s remarks.