Business
Terence Corcoran: A ‘guide’ to the Trump-Canada steel tariff war
In This Article:
Baffled and struggling to understand the steel tariff war now raging between Canada and the United States? Don’t worry. I’m here to take you through the mess leading up to President Donald Trump’s decision to raise the tariff on Canadian and other imported steel to 50 per cent from 25 per cent. We won’t go back too far in time, otherwise the story gets even more muddled.
We begin a year ago when the Biden administration in May of 2024 announced a 25 per cent tariff on Chinese steel and a 100 per cent tariff on electric vehicles to protect American jobs against China’s “unfair trade practices concerning technology transfer, intellectual property and innovation.”
Canada tagged along in August 2024, when the Trudeau government announced a 100 per cent tariff on electric vehicles made in China and a 25 per cent tariff on steel and aluminum imports from China. The reason for the tariffs was allegedly unfair competition from Chinese producers, who benefit from “non-market policies and practice,” including state-directed policy of overcapacity and lack of rigorous labour and environmental standards.
While these trade policies were imposed, in the corporate background a steel takeover battle was unfolding. In late 2023, Japanese steel giant Nippon Steel Corp. had launched a US$15-billion takeover of United States Steel Corp., a bid opposed by the Biden administration, which supported the steelworkers’ opposition to the foreign takeover. So did Donald Trump: “I would block it instantaneously. Absolutely.”
Around the time Biden formally blocked the Nippon takeover in January 2025, another steel company, Ohio-based Cleveland-Cliffs Inc., launched a competing bid for U.S. Steel. But then along came Trump, with a changed mind. A few days ago he described the Nippon takeover of U.S. Steel as a great international “partnership,” a “blockbuster agreement” that would ensure U.S. Steel remains an American company despite the takeover. At the same time, Trump raised tariffs on imported steel to 50 per cent, thereby giving Nippon/U.S. Steel a protective tariff boost. Was that part of the takeover agreement — which as of this writing had not been formally approved?
That leaves Cleveland-Cliffs as a takeover loser. Back in January, Cleveland-Cliffs CEO Lourenço Gonçalves said he wanted to buy U.S. Steel because he had a plan. “I have a plan. I have an all-American solution in place,” he said. “I know we can make American steel great again.” But his plan was apparently not as a great as Trump wanted, which means Nippon will be charged with making U.S. steel great again — a prospect that apparently does not sit well with some Japanese officials.