Canadian Prime Minister Mark Carney needs to adopt aggressive US-style protectionism and break free trade agreements to stop foreign steel entering North America, billionaire steel tycoon Barry Zekelman has said.
If he does not, President Donald Trump will crush Canada’s steel industry, warns the chief executive of Zekelman Industries.
“The highly integrated North American market is going to disappear, it’s vaporising in front of our eyes, to the benefit of the US,” he said.
Zekelman, a Maga-aligned Canadian who owns a mega-yacht called “Man of Steel”, said Canada was “an open backdoor for China and others” and needed to rip up trade deals with “the biggest violators in steel”.
“The US has their foot on Canada’s throat . . . They’re not taking it off until Canada shows it will stop trans-shipments and protect its own industry,” he said.
Although the US has a free trade deal with Canada, Trump has imposed 50 per cent tariffs on all steel imports under Section 232 of the US Trade Expansion Act, which empowers him to set levies on imports for national security reasons.
Trump’s tariffs have been “catastrophic” for Canada’s C$15bn (US$11bn) steel industry, which sends 90 per cent of its exports to the US, employs 23,000 workers and supports an additional 100,000 indirect jobs, according to the Canadian Steel Producers Association.
“We’re definitely not a backdoor,” said François Desmarais, the CSPA’s vice-president of trade and industry affairs. “Every national steel industry is in a fight for their lives because of Chinese overcapacity, which has created a glut of steel being dumped around global markets.”
In early December, Algoma Steel, a leading Canadian producer, announced 1,000 job cuts at a plant in Ontario, despite a C$500mn government bailout for the sector.
Fair competitive access to markets and customers “was shattered six months ago with the unprecedented 50 per cent tariff imposed by the United States — effectively closing off a market”, said Michael Garcia, chief executive Algoma Steel.
Smaller closures have occurred across the country this year as steel exports have dropped 40 per cent, according to Statistics Canada.
In response, Ottawa has launched a “buy Canadian” campaign to reduce dependence on imports, which “supply almost two-thirds of current Canadian consumption of steel”, according to Carney.
But Zekelman said steel products from South Korea, Japan, Turkey, Thailand, Vietnam, the United Arab Emirates and Oman were still being used at the expense of local or US products.
In early December the Canada Border Services Agency found that certain carbon and alloy steel wire imported into Canada was “dumped”, sold at unfairly low prices, by countries such as China, India and Turkey.
Canada’s industry minister, Mélanie Joly, told the Financial Times that Zekelman should help build trust between the White House and Ottawa rather than promoting protectionism.
“He needs to talk to his friend Trump and talk how much we should be working together in the steel sector rather than one against the other,” she said, rejecting Zekelman’s calls for tighter protections in the market. “We’ve done that,” she added.
Zekelman is the top North American supplier of steel tubing, with 20 plants in Canada and the US and sales in excess of $4bn a year. He said Trump’s steel policies would be so successful that the US would go from buyer to seller in the next decade.
“Europe is getting crushed . . . Britain produces nothing anymore. At some point, the US will be exporting steel to Europe, because they’re a lower-cost producer and they’re going to have the capacity,” he said.
Zekelman is a Trump supporter and dined with him in 2018. In April 2022 the US Federal Electoral Commission fined the industrialist and his companies $975,000 for illegal contributions as a foreign national to a pro-Trump political group.
“Yeah, I’m a Make America Great Again. Sure I am. I’m also a Make Canada Great again,” he said.
Zekelman supplied steel used in the construction of the US-Mexico border wall during Trump’s first presidency, which he said was the result of a “very competitive bidding process”.
He denies that his donations to the president have given his company preferential treatment.
“If you told me that I could go write a cheque and get the fucking trade agreement that I wanted, I’d do it tomorrow. It doesn’t work that way. That is absolute bullshit,” he said.
Ottawa in June imposed new quotas and 50 per cent tariffs on excess steel from non-free-trade-agreement countries, such as China, to make it harder and more expensive for those countries to sell steel into Canada.
Carney has also cut quotas for non-FTA countries to 20 per cent of 2024 levels and to 75 per cent for non-USMCA free trade partners.
Zekelman said that while the measures were a step in the right direction, the only thing that would appease Trump would be ending all imports from non-USMCA members.
“You have to. This is a force majeure. The world has changed,” he said.
