Steel executive warns Canadian steel has no market outside U.S.

Algoma Steel’s Chief Executive Michael Garcia says U.S. President Donald Trump’s 50 per cent tariff on Canadian steel could effectively shut the country’s producers out of their largest export market.

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Algoma Steel’s Chief Executive Michael Garcia says U.S. President Donald Trump’s 50 per cent tariff on Canadian steel could effectively shut the country’s producers out of their largest export market, forcing the industry to overhaul its operations.

Garcia told the Financial Post that while Algoma still has contractual obligations to fulfil in the United States, those will wind down within the year if the tariff remains in place. “Once the full effect of them plays out, it will effectively lock out Algoma and, frankly, other Canadian steel producers from the U.S. market,” he said in the Thursday interview.

The Sault Ste. Marie, Ont., company has asked Ottawa for a $500-million enterprise tariff loan facility to weather the trade uncertainty.

Garcia said the request is not tied to immediate liquidity concerns but is intended to safeguard operations while the company adjusts to the loss of U.S. sales and navigates an uncertain Canadian market.

If access to the U.S. remains blocked, Garcia said producers will have to pivot to the domestic market, which has been supplied roughly two-thirds by foreign steel in recent years.

Algoma, Canada’s only plate steel producer, sees potential opportunities in infrastructure and defence projects under Prime Minister Mark Carney’s nation-building agenda, but Garcia noted that significant demand from those projects has yet to materialize.

“Our challenge is to bridge the company into the future, make sure we’re making the right type of products, and will be there when that demand appears,” he said.

He added that resolving the tariff situation would ease pressure across the industry, but until then, mills will need to invest and retool to align with Canadian consumption patterns.

That could mean producing fewer coils and more plates for sectors such as shipbuilding, energy and defence.

Algoma has recently signed partnership agreements with shipbuilders, including B.C.-based Seaspan, and is positioning itself to supply marine plates if domestic shipbuilding ramps up.

Garcia said the company has a history in the sector and is ready to rejoin the supply chain should projects be awarded and dormant shipyards return to activity.

“There really are no practical foreign markets for Canadian steel other than the U.S.,” Garcia said. “If there’s no economic access to customers in the U.S., then we need to look to the domestic market.”