Politics

Canadian company that helped build new World Trade Center hurt by Trump's steel tariffs

Quebec-based ADF Group has laid off 50 workers already in escalating trade dispute

July 05, 2018

A worker welds a part at ADF Group's shop in Terrebonne, Que., on July 3, 2018. (Lisa Laventure/CBC)
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Donald Trump's tariffs on steel are hurting a Canadian company that played an instrumental role in building an iconic symbol of American perseverance in U.S. President Donald Trump's home city.

ADF Group, a Quebec-based steel producer which constructed a significant portion of the new World Trade Center, has already laid off 50 workers because of the escalating trade dispute.

"We feel kinda flustered, and we feel betrayed by that," said plant manager James Paschini.

ADF Group had 300 employees in its Terrebonne, Que., shop working on the World Trade Center project over a five-year span.

"All of the outer skeleton or outer rim of the World Trade Center — 70 per cent of it was done in this shop," Paschini said with audible pride during an interview with CBC News on the plant floor.

"The full antenna was done in the shop here, and the hub, which is the transportation hub, a lot of that steel came from the shop here in Terrebonne."

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'It doesn't make sense'

Making the situation even more baffling for ADF Group managers is the Trump administration's stated justification for the tariffs — the claim that Canadian metals constitute a security threat to the United States.

"Being labelled now as a national security threat … it doesn't make sense," Paschini said.

The Trump administration introduced 25 per cent tariffs on steel and 10 per cent tariffs on aluminum from Canada, Mexico and the European Union on June 1 — part of what it claims is an attempt to bolster American domestic steel production and capacity to cope with future national emergencies.

However, Trump has boasted publicly about using the tariffs as leverage over Canada and Mexico to secure advantage in the NAFTA negotiations.

U.S. Commerce Secretary Wilbur Ross, meanwhile, has said the tariffs are a way to force America's allies to do more to crack down on the transshipment of cheap Chinese steel.

The Canadian government has called the tariffs "insulting" and "illegal" and introduced retaliatory tariffs of its own on July 1.

ADF Group plant manager James Paschini says: 'We're trying to save a lot more than just one job. We're trying to save everyone together.' (Lisa Laventure/CBC)



But ADF Group felt the sting of Trump's tariffs even before they came into effect.

Paschini said the company was bidding on three major contracts in the U.S. back in March, when Trump ramped up his threats to impose tariffs.

He said he believes ADF Group lost the bids because of the uncertainty over Trump's tariff policy, coupled with pressure on U.S. companies to "buy American."

"Those three jobs got cut out of our scope, basically, because we were Canadian, and there was a lot of uncertainty behind what was told about the tariffs," Paschini said.

"We didn't know who was going to pay for them. We had no clue how it was going to impact the business or our clients in the U.S., so it became a struggle."

Managers were relying on landing those contracts — and when they didn't pan out, Paschini said, he was forced to lay off 50 of the 500 workers at the plant.

"Those were bad days," he said as he started to choke up.

With tariffs now in effect, the company is being hurt in two additional ways.

Border squeeze

Any Canadian steel shipped to ADF Group's second production facility in Great Falls, Montana is hit by the American tariffs, while any steel it imports from the U.S. is subject to duties from Canada's retaliatory tariffs.

In the hopes of preventing further layoffs, the company is operating on a significantly reduced schedule and is making use of the federal government's 'work-sharing' benefit. The benefit offers income support to workers eligible for Employment Insurance benefits "who agree to work a temporarily reduced work week and share the available work while their employer recovers," says a statement on Service Canada's website.

Late last month, Foreign Affairs Minister Chrystia Freeland announced Ottawa would extend the availability of the work-sharing benefit by 38 weeks — to 76 weeks — for companies caught by the trade dispute.

Paschini said he's hoping the tariff war doesn't drag on for months and that he can eventually bring laid-off workers back. The company has been holding town-hall meetings, he said, to reassure workers and "let people understand that we're going through this together."

One World Trade Center on May 10, 2013 in New York City. (Timothy A. Clary/AFP/Getty)



"We're trying to save a lot more than just one job. We're trying to save everyone together."

He said workers regularly ask him whether the company is close to landing any new contracts and when it might return to full capacity.

"I have no definite answer for them," he said, adding that some good news could be headed the company's way.

Although details at this point are confidential, Paschini said ADF is in line for some additional work in September through a new contract with an American company.

"It's a fast-track job ... a very good job that will boost morale."

If this tariff war lasts for much longer, managers like Paschini might need all the morale-boosters they can get.

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The U.S. steel tariffs are already affecting one Canadian manufacturer in Quebec.  3:06

ABOUT THE AUTHOR

Katie Simpson
Politics

Katie Simpson is a senior reporter in the Parliamentary Bureau of CBC News. Prior to joining the CBC, she spent nearly a decade in Toronto covering local and provincial issues.

With files from Tom Parry
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