The imposition of tariffs on Canadian steel and aluminium by U.S. President Donald Trump on March 12 has sent shockwaves through Canada’s manufacturing sector. The tariffs, which target steel and steel derivatives, have already triggered hundreds of job losses, with further economic fallout expected in the coming weeks.
Economists warn that this is only the beginning, as additional tariffs are set to take effect on April 2. With Canada being the largest supplier of steel to the United States, the ripple effects of these trade policies are being felt across the industry, impacting workers, businesses, and the broader economy.
According to union representatives and company officials, at least 200 workers have already lost their jobs due to the tariffs. Marty Warren, national director of the United Steelworkers, North America’s largest private-sector union, confirmed that layoffs have begun in multiple steel-producing companies.
One of the hardest-hit firms is Canada Metal Processing Group, which had already warned in a February 24 press release that it would be forced to cut 140 jobs if the tariffs were implemented. With the tariffs now in place, the company has followed through on its warning.
A company spokesperson confirmed that the job cuts include a mix of permanent layoffs, temporary dismissals, retirements, and work share arrangements. Additionally, the firm has introduced a hiring freeze, meaning that no new or vacant positions will be filled for the foreseeable future.
The tariffs are causing significant disruptions, not just for steel manufacturers, but for companies that rely on steel imports and exports. Ontario-based Algoma Steel has already begun cutting jobs, with CEO Michael Garcia confirming that around 20 employees have been laid off.
“If we don’t secure new Canadian customers, we may be forced to cut even more jobs,” Garcia warned.
Warren, from the United Steelworkers, has expressed deep concern over the growing crisis, stating:
“Every lost job is a devastating hit. When the full-blown tariffs come into effect on April 2, we expect up to 100,000 of our members to be impacted.”
For Scott Noseworthy, a shredder operator at Canada Metal Processing Group’s Ivaco plant, the situation remains precarious. Workers were warned about potential layoffs over a month ago, but confirmation only came recently.
“When Trump imposed the tariffs, it brought everything to a halt,” Noseworthy explained. While he has temporarily been reassigned to maintenance and cleanup duties, his long-term employment is uncertain.
The Economic Impact of U.S. Tariffs on Canada
Canada is one of the world’s leading steel exporters, supplying over 50% of U.S. steel imports. The sudden tariff imposition has disrupted supply chains and increased production costs for Canadian manufacturers, making it harder for them to compete in the global market.
Economists predict that the tariffs will lead to:
- More plant closures as companies struggle to absorb additional costs.
- A slowdown in exports, causing financial strain on steel manufacturers.
- Higher prices for consumers, as businesses pass on additional costs to buyers.
- Declining investor confidence, making it harder for the industry to attract capital.
The uncertainty surrounding trade policies has also discouraged businesses from making long-term investments. As a result, some companies have frozen expansion plans or scaled back production.
Government Response and Worker Support Measures
In an effort to mitigate the economic blow, Canadian Prime Minister Mark Carney announced a series of relief measures, including:
- Earlier access to employment insurance for affected workers.
- A multibillion-dollar aid package to support struggling businesses.
- A work-sharing program, which allows employees to work reduced hours while receiving employment insurance benefits.
Despite these measures, labour advocates and economists argue that more substantial reforms are needed. Some of the proposed solutions include:
- Expanding employment insurance eligibility to cover more laid-off workers.
- Introducing a minimum weekly benefit to ensure financial stability for those impacted.
- Providing additional tax relief for businesses affected by the tariffs.
Economist Armine Yalnizyan, an Atkinson Fellow on the Future of Workers, emphasized that while these temporary adjustments may help in the short term, long-term solutions will require legislative action.
Ongoing Monitoring and Industry Advocacy
The Canadian government has pledged to closely monitor the impact of the tariffs and take further action if necessary.
Mila Roy, a spokesperson for the labour department, stated in an email:
“The Government of Canada will continue to assess the impact of the tariffs and introduce additional measures to support businesses and workers as required.”
Meanwhile, labour rights organizations, such as the Workers’ Action Centre, are already witnessing widespread layoffs among smaller subcontractors and businesses that rely on steel imports.
Deena Ladd, executive director of the Workers’ Action Centre, highlighted the uncertainty surrounding the industry, stating:
“Things are changing every day. That uncertainty is bad for employers, for businesses, and especially for workers who don’t know if they will have a job next month.”
What’s Next? Potential Outcomes of the Trade Dispute
As the April 2 deadline approaches, Canadian steel manufacturers are racing to secure alternative markets and lobbying the government to negotiate with the U.S. administration.
There are three possible outcomes:
- Canada retaliates with its own tariffs, escalating the trade war and further harming both economies.
- Negotiations lead to exemptions, similar to what Canada achieved in previous disputes under the US-Mexico-Canada Agreement (USMCA).
- Canadian steel companies shift focus to other markets, such as Europe or Asia, to offset losses from the U.S.
The U.S. tariffs on Canadian steel and aluminium have already begun disrupting the industry, causing mass layoffs, financial uncertainty, and economic instability. With additional tariffs set to take effect on April 2, the situation is expected to worsen before any potential relief is reached through negotiations.
While the Canadian government has introduced temporary relief measures, labour leaders and economists warn that stronger policy interventions are needed to protect jobs and keep the industry afloat.
As businesses and workers brace for further economic hardship, the focus now shifts to how Canada will respond—whether through diplomatic negotiations, economic relief, or retaliatory trade measures. The coming weeks will be crucial in determining the long-term impact of this trade dispute on Canada’s steel and aluminium sector.
