When President Donald Trump dropped tariffs on steel from America’s neighbors, it brought tears to the eyes of employees at the biggest Canadian steel company.
Alan Kestenbaum, executive chairman at Stelco Holdings Inc., said emotional staff approached him to express thanks that the company spared their jobs. Elsewhere in the industry, employees uncorked champagne in celebration.
The Trump administration on Monday officially removed the steel and aluminum tariffs it imposed on Canada and Mexico a year ago on the basis of protecting national security. The agreement ended a simmering trade dispute that had hurt Mexican and Canadian producers, along with U.S. consumers and companies that faced higher prices for steel and aluminum.
The extra cost aluminum consumers pay to have metal shipped to their facilities in North America surged 26% since last March when Trump announced the tariffs, while American steel prices jumped 14% in 2018.
The removal of the tariffs may have a secondary benefit for business, as it clears a major legislative hurdle for all three governments in advancing the new North American free-trade agreement, known as USMCA. The deal may help regional producers and downstream makers of steel and aluminum products by requiring that more of the content in cars originate in North America.
“By being in Hamilton and seeing workers come up to me who I’ve never met, coming up to me with tears in their eyes thanking me for not making layoffs when the tariffs were in effect, that really affected me,” said Kestenbaum, who was at the Hamilton Works plant with Prime Minister Justin Trudeau when he announced the agreement on Friday.
“You feel gratified, but also emotional when they tell you this,” he said in an interview.
The decision triggered a near-universal celebration across industry.
The biggest American steelmakers, including U.S. Steel Corp., Nucor Corp. and AK Steel Holding Corp., said it was a “logical step” and urged the Trump administration to “stay vigilant” to prevent circumvention schemes. The deal to remove tariffs included provisions to monitor for any surge in imports of the metals from Mexico and Canada and tougher measures to prevent foreign-made steel from entering the U.S. duty-free.
The two-largest American aluminum producers, once split by the decision to slap tariffs on close trade partners, set aside their differences and expressed satisfaction with the decision.
The Aluminum Association of Canada said it will enable the “full realization” of the potential new regional trade agreement, while Mexico’s National Chamber of the Iron and Steel Industry called it a positive step across the trade region.