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Canada’s measures need to be “more punitive, more rigorous,” to protect the health of the domestic steel industry, Zekelman said on Wednesday. “They need to do exactly what the US is doing.”
Zekelman also rejected the view that the US and Canda are “aligned in trade values,” an opinion shared by Francois Desmarais, the vice president for trade and industry affairs at Canadian Steel Producers Association.
“We are not aligned,” Zekelman said emphatically, questioning “why the Canadian steel market is 65%-70% imports reliant, and why the domestic steelmakers had to sell steel to the US?”
“The numbers don’t lie – Canada produces 12 million-13 million tons of steel, and consumes about the same annually,” Zekelman said. “Domestic Canadian producers have to pay a carbon tax of C$95 ($69.74) per ton of steel, but there is no carbon tax on imports.”
The weak market fundamentals in Canada can push companies to move their capital decisions to the US instead, Zekelman warned.
“I want Canada to be strong against dumped steel; we need to mirror the US,” Zekelman added, enumerating the benefits of protectionist trade policies that were adopted by US president Donald Trump in 2025.
Trump imposed 25% tariffs on all steel and aluminium imports on March 12, 2025, under the umbrella of Section 232 of the 1962 Trade Expansion Act, and doubled it to 50% on June 4.
“After the imposition of Section 232 tariffs, US steel prices have gone up, mergers and acquisitions activity has gone up, and there are new investments in the US,” Zekelman said.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US Midwest was calculated at $48.56 per hundredweight ($971.20 per short ton) on Wednesday, up by nearly $10 per cwt or by 25.87% from the assessment on February 11, 2025, when it was calculated at $38.58 per cwt.
“I don’t think the US HRC price will go as high as $1,000 per ton ($50 per cwt), it will not go into the four digits, to keep steel imports from coming in,” Zekelman said. “The US producers will trade at tolerable numbers, and even if the mills realize a price of $900-950 per ton for HRC, they will be happy with it.”
“I think it will be a good year for steel in the US in 2026,” Zekelman said.
The protectionist tariffs have led to a surge in US production in 2025, leading to higher shipments for domestic producers last year.
The US government imposing 50% Section 232 tariffs against Canada and Mexico, the North American neighbors who operated within a free trade pact under the US-Mexico-Canada (USMCA) agreement, disrupted mature supply chains between the countries, particularly harming the Canadian flat-rolled steel producers who till last year sold significant tonnages to US customers.
For example, Sault Ste Marie-based Algoma Steel shut down operations at its blast furnace and coke oven on September 29, 2025, and said it was expecting an adjusted loss before deductions in the range of C$95 million-105 million for the fourth quarter of 2025.
Partly in response to the damage wrought by the Section 232 tariffs, Canada implemented a ‘Buy Canadian’ policy in December 2025, under which Canada-produced steel, aluminium and wood products will be required for use in large federal construction and defense projects.
Canada also tightened the tariff rate quota (TRQ) levels for steel products from non-free trade agreement partners from 50% to 20% of 2024 levels. And for non-USMCA partners with which Canada has a free trade agreement, Canada will reduce tariff rate quota levels for steel products from 100% to 75% of 2024 levels.
There are provisions to get exemptions from the “Buy Canadian” policy for steel products and grades that are not available locally.
Additionally, Canadian prime minister Mark Carney announced in July 2025 that any steel product that contains steel melted and poured in China will face a separate tariff, unless the product is from the US.
Canadian demand for hollow structural section (HSS) is much weaker than demand for the same product in the US, Zekelman told Fastmarkets.
“The HSS supply [from Canadian producers to the US] has fallen off somewhat after the introduction of the Section 232 tariffs, but it has bounced back somewhat recently,” Zekelman said on Wednesday.
One Canadian distributor admitted that his HSS mill offer prices had reduced in the past weeks, and Zekelman agreed that Canadian HSS prices were depressed compared with the US.
“The Canadian markets are much weaker, and demand is pretty ugly,” Zekelman said, comparing with the “robust” US markets, which is being bolstered by increasing demand from “data centers, manufacturing, and the border fence.”
In contrast, US HSS prices have been strengthening since the end of October as domestic producers have pushed through five price increases since then, bolstered by strong demand, especially for the building of the US-Mexico border wall.
Fastmarkets assessed steel hollow sections ASTM A500 Grade B domestic, fob mill US at $1,540-1,560 per ton ($77-78 per cwt) on February 5, up by $60 per ton from the previous week.
This price discrepancy between the US and Canadian HSS means that the “US needs Canadian HSS,” Zekelman said, despite the tariffs.
Chicago-headquartered Zekelman Industries is a major manufacturer of steel pipe and tube products, with locations spanning from Blytheville, Arkansas, Rochelle, Illinois, to manufacturing hubs in Ontario and Manitoba, Canada.
The company had launched a “Steel Here” media campaign in October 2025 to encourage the use of American steel.
There will be no trilateral deal in a revamped USMCA, Zekelman said, adding that bilateral deals will likely emerge from the renegotiations.
“Why will the US let Canada and Mexico come together? There is an entire country in between,” Zekelman told Fastmarkets.
The first joint review of the USMCA, for which negotiations are ongoing, is due on July 1.
Market experts have previously claimed that a complete “decoupling” of US and Mexico is impossible, and that bilateral trade deals are a possible outcome post negotiations between the North American neighbors.
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