Cleveland-Cliffs has spent the past year arguing that 50% US steel tariffs are essential to its business. On Monday, the company’s Canadian subsidiary showed the other side of that policy.
The company’s acquired Canadian subsidiary, Stelco, said it will indefinitely idle its cold-rolled and coated operations at Hamilton Works beginning around October 9, with as many as 500 employees affected across its Hamilton and Lake Erie facilities. The company said US Section 232 tariffs have contributed to a sharp contraction in demand for the products made by the operation.
The announcement creates an unusual split inside Cleveland-Cliffs’ North American business. The company describes the same US tariff regime as a competitive advantage for its American steel operations.
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In its latest annual filing, Cleveland-Cliffs said the Trump administration’s increase in Section 232 steel tariffs from 25% to 50% had helped create a more favorable US market. The company said it expects to benefit from the tariffs “for years to come.”
President Donald Trump raised the Section 232 steel tariff to 50% effective June 4, 2025.
The impact in Canada is moving in the opposite direction. Stelco said demand for its cold-rolled and galvanized products in markets it traditionally serves was nearly 25% lower in Q2 2026 than the quarterly average in 2024. Canadian market demand was down about 10%, according to a company memo reported by The Canadian Press.
The company linked the deterioration partly to the trade disruption caused by US tariffs, while also pointing to persistent import pressure inside Canada.
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“In the face of continued market uncertainty and prolonged injury to Stelco’s business resulting largely from steel imports into Canada,” the company said it had been forced to idle the Hamilton finishing operations.
The US tariff is not the only pressure behind the shutdown. Canada has imposed tariff-rate quotas aimed at limiting steel imports, and Cleveland-Cliffs said as recently as its second-quarter filing that those measures should support better margins at Stelco through 2026 and beyond.
The company also reported that Canadian steel imports had fallen below historical levels during the first half of the year.
Stelco now says those measures have not reduced imports enough to offset the broader market disruption.
Cleveland-Cliffs spokesperson Pat Persico told The Canadian Press that Stelco’s total steel production tonnage is not expected to change. Production will instead be concentrated at Lake Erie Works in Nanticoke, and the company expects a significant number of affected Hamilton employees to be offered jobs there.
The idling also comes less than two years after Cleveland-Cliffs acquired Stelco. When the deal was announced in July 2024, Cleveland-Cliffs valued Stelco at approximately US$2.5 billion in enterprise value and presented the acquisition as an expansion of its Canadian footprint.
Among its commitments, Cleveland-Cliffs said Stelco would continue “significant operations” in Hamilton and Nanticoke, maintain significant Canadian employment levels, invest at least C$60 million over three years, and increase steel production from its Canadian facilities.
The acquisition closed November 1, 2024. Cleveland-Cliffs later reported total purchase consideration of approximately US$3.21 billion, including $2.45 billion in cash, $343 million in share consideration, and $415 million in debt consideration.
The contrast was amplified Monday when Trump announced a planned $15 billion steel complex in Iowa by Mesabi Metallics.
The plant is expected to initially produce about 7.5 million tons of steel annually, potentially increasing to roughly 10 million tons, with steel production targeted to begin around 2030. The project is expected to create about 1,750 permanent Iowa jobs and as many as 6,000 construction jobs.
Trump explicitly connected the investment to his tariff policy, saying 50% duties on foreign steel were helping revive domestic production. The American Iron and Steel Institute made the same argument, saying Section 232 tariffs helped create conditions for new US steel investment.
Cleveland-Cliffs itself has made essentially that case for its US operations, but its Canadian subsidiary is now demonstrating the opposite side of the same border.
