Mike Garcia says the definitions have created a cloud of uncertainty that change his actions
Article content
On Wednesday morning, on the second day of the United States and Canada trade war, Mike Garcia, CEO of St. Saint. Algoma Steel Inc. Marie, by stopping all shipments to the United States
Article content
Article content
His concern was that US Secretary of Trade Howard Lootnick on Tuesday afternoon suggested that the 25 percent tariffs be modified on Canadian imports within hours.
Advertisement 2
This announcement has not yet been downloaded, but your article is continuing below.
Article content
Garcia had his doubts, but he could not ignore Lottenic's comments, so he put shipments despite the headache and frustration it caused. It was only an example of how the definitions created a cloud of uncertainty that changed his work.
He said: “Steeling companies were not designed to work in an actual time based on an interview that someone just presented on MSNBC.”
In fact, 2,800 people retain the son -in -law at the steel factory in his company in Sault Ste. Mary works 24 hours a day, seven days a week. Perhaps once a year, the company will stop maintenance purposes, but at a large cost.
In 2018, US President Donald Trump also ordered 25 percent on steel to Canada, the United States and Mexico signed a new free trade agreement. This time, the definitions are wider – affect almost all Canadian products – and Trump threatens an additional 25 percent on steel and aluminum can come into effect on March 12.
As an importer for registration, Algoma is responsible for paying a 25 percent tariff on the flat steel and cabbage that he sent to Garcia, USA, that his company can only do so because steel prices have risen more than 30 percent since January, which economists say it is an inflationary effect of definitions on themselves.
Advertising 3
This announcement has not yet been downloaded, but your article is continuing below.
Article content
If the second layer of customs duties entered on March 12, which raised the total tax to 50 percent, he says it will immediately cut exports to the United States
He said, “This immediately makes half of our orders under water, and this will be a very serious threat to the company.”
Steel companies were not designed to work in the actual time based on an interview that someone just presented on MSNBC
Mike Garcia
However, the current definitions of 25 percent cause Algoma to “rethink our business structure and customers who are in a better service position.” The company has already registered 20 employees because it seeks to maintain money for what could be a long and rough patch.
The problem is that Algoma sends 50 percent to 60 percent of steel to the United States, and no one knows what Trump hopes to accomplish with definitions this time, or, for this issue, to the time it will continue.
One of the solutions that Garcia and others in this sector hope that the Canadian federal government puts a customs tariff for foreign steel against the United States and China, which was enacted last fall, as well as many other countries.
Although there may be opportunities to export more steel to Mexico, many people inside the industry still believe that developing the local local steel market carries more promise.
Advertising 4
This announcement has not yet been downloaded, but your article is continuing below.
Article content
Garcia said that the European market is already serving by its local producers, making the entry of this bloc difficult.
Algoma sells steel to a wide range of companies that you use to make pipes for the oil, gas, plumbing, vehicles, etc.
Garcia said that his company is not in a position to re -invent the products it makes.
“There is a lot of uncertainty in making a basic shift in what this company is doing,” he said.
In part of it, this is due to the fact that the Algoma Steel factory, one of the three most important in Canada, was in the midst of a shift that started in 2022. He plans to replace the smelting oven with coal with an electric arc oven at a cost of more than 800 million dollars.
A lot of attention focused on this change on environmental benefits, including a 70 percent decrease in carbon emissions, but Garcia said that the switch would make the company more efficient.
Electric arc furnaces use a batch process that takes about 45 minutes, allowing the company to increase or decline more easily.
He said that the company hopes to launch the first oven from the Electricity Arc in the next few weeks.
Advertising 5
This announcement has not yet been downloaded, but your article is continuing below.
Article content
“We will not be allowed to make armament iron or long products. We cannot make galvanized steel or stainless steel. Garcia said:” The steel we do will be much more than competitive, and we will be able to stop the operations if the demand is low. “
From the window of his office, the international bridge that runs on the St. Maryz River between Ontario and Michigan is seen, a position that he literally and metaphorically on the front lines of the American trade war and Canada.
This time, Garcia said that his community takes the trade war more personally because it puts the neighbors against each other. Even the Canadians who use Trump have difficulty rationalizing his definitions.
He said: “Regardless of what they might feel about his comprehensive attractiveness as a candidate or plain, or all other things that they believed would do to the United States, when it comes to tariffs, they give him.”
Also, the set of customs tariffs has destroyed the highest levels of government to reduce Canada's dependence on the United States Natural Resources Minister Jonathan Wilkenson.
Advertising 6
This announcement has not yet been downloaded, but your article is continuing below.
Article content
“Canada will never return to where we were three months ago, and we trusted the Americans the way we did, and that they would act rationally on trade,” Wilkinson said.
Garcia was cautious about how to play all this. His company can continue to swallow the 25 percent definitions as long as steel prices in the United States remain high, at least for a few months.
He said: “I do not know how much we will sell in the United States, but I know that we will make steel and sell it to customers who are really happy with Algoma Steel.”
It is recommended from the opening
-
Older car makers 3 get a single -month tariff: direct updates
-
Will Tesla benefit from the North American tariff?
“Perhaps they will all be Canadian, maybe they will be Canadians, Mexicans, Europeans, or maybe we and Canadians will be. I just don't know.”
• Email: GFriedman@postMedia.com
Put a reference signal on our website and support our journalist: Don't miss the business that you need to know – add Financialpost.com to your reference signals and subscribe to newsletters here.
Article content