The layoff at the seamless tube mill in Sault Ste Marie was effective Sunday July 1. The company attributed the reduction to the new US tariffs and also the impact of imported steel from abroad originally intended for sale in the US that is being redirected into Canada, Cody Alexander, president of United Steelworkers union Local 9548, told American Metal Market.
“So it’s really a double hit for us,” he said, noting that 30-50% of that mill’s volume was being sold in the US prior to the Section 232 but Algoma Tubes can’t compete in that market with the 25% tariffs added on.
The tube mill was idle for eight months in 2016 due to a downturn in the energy industry but began recalling at least 120 workers for restart in November of that year. Those laid off on Sunday were new hires added within the past six months due to the continued expansion of operations.
At its peak in 2014, Algoma Tubes employed about 500 people. The recent work force had ramped up to almost 450 before Sunday’s reduction, Alexander said. The Canadian steel community had hope for a compromise between the US and Canada before US President Donald Trump’s June 1 deadline for instituting tariffs, he added.
Canada’s retaliatory tariffs went into effect on the same day as the Algoma Tubes layoff, and the Canadian government is said to be preparing other safeguard measures to control the flow of the diverted steel imports.
On June 27, USW Canadian director Ken Neumann told the House of Commons committee on international trade that the retaliatory tariffs are appropriate to balance out the Section 232 actions.
“We support the countermeasures announced by the federal government and believe that they must be comprehensive and immediate,” he said, adding that it’s preferable in this situation to strike back at Trump. “If you don’t poke the bear, he’s going to eat your lunch.”