Canadian steelworkers were 'sacrificed' to make new trade deal, union says

As Canadian and American officials celebrate a new, trilateral trade deal with Mexico, steel and aluminum tariffs continue to linger — but experts say they might not last long.

Economist says continuing with tariffs 'doesn't make sense' in face of USMCA

A Dofasco employee looks at rolls of coiled steel in Hamilton last March. Hefty tariffs on steel and aluminum weren't lifted under the new United States-Mexico-Canada Agreement. (Tara Walton/Canadian Press)

The union representing Canadian steelworkers says they were "sacrificed" to make a new trilateral trade deal with Mexico.

Negotiators hammered out the United States-Mexico-Canada Agreement (USMCA) just hours before the midnight deadline Sunday.

It touches on areas ranging from the auto sector to dairy, egg and poultry markets, but failed to exempt Canada from steel and aluminum tariffs put in place by the Trump administration.

Talks to lift the tariffs continue, but on a "completely separate track," according to a U.S. official.

It doesn't make sense that you'd make an agreement ... and there would be a tariff on a particular good.- Atif   Kubursi , economist

That news is little consolation to the "tens of thousands of Canadian families who have been left in the lurch" to make the trade deal happen, according to a statement from USW Canada, the union representing Canadian steelworkers.

"Canadians expected that an agreement on NAFTA would result in the U.S. lifting the bogus national-security tariffs on Canadian steel and aluminum," wrote USW director Ken Neumann in a statement. 

"Instead, it appears Canadian steel and aluminum workers are among those being sacrificed in the concessions made by the Liberal government in this deal."

The tariffs of 25 per cent for steel were bad news for about 10,000 direct steel production jobs in Hamilton, at companies like ArcelorMittal Dofasco and Stelco, and 30,000 other jobs as that could be made more insecure, the local chamber of commerce has estimated.

But Chuck Bradford, a steel industry analyst based in New York said he believes the USMCA is an "encouraging sign" for what's to come.

"Hamilton steel, especially Dofasco, is heavily geared toward supplying U.S. automakers," he explained. "If there's a deal for auto parts, it's not that far to a deal for steel."

Economist and McMaster University professor emeritus, Atif Kubursi, agreed continuing to exclude a particular commodity from the new pact seems unlikely.

"It doesn't make sense that you'd make an agreement that's an overall architecture of maintaining the trade relationship between Canada and the U.S. and there would be a tariff on a particular good."

Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland meet the media in Ottawa Monday after the United States-Mexico-Canada Agreement (USMCA) was announced. (Sean Kilpatrick/The Canadian Press)

The new deal was cheered in a tweet from Hamilton Mayor Fred Eisenberger, who encouraged negotiators to keep fighting for steel.

"We need to continue to fight illegal tariffs on Cdn steel & aluminum," he wrote. "Our steel industry has stood the test of time, is adaptive & resilient & employs 10k in #HamOnt. We must protect these jobs!"

Keanin Loomis, chief executive of the Hamilton Chamber of Commerce, said he believes Canada needs to show it's serious about protecting its borders from non-market steel coming from countries like China, if we want the U.S. to remove its tariffs.

He added it's his opinion the tariffs were a way for the Trump administration to gain leverage in the trade negotiations. Now that there's a deal, they should be able to "back out of this with their dignity intact."

Lessons on trading with Trump

Bradford and Kubursi both said the tough negotiations from the months leading up to the new agreement will have taught Canadian officials a little about their trading partner, President Donald Trump.

"He's a negotiator and he takes an extreme position and leaves room for compromise," said Bradford. "People look at the extreme position and think that's the end, but that's not what he's been doing."

Those tough lessons could help them take on the tariffs and help Hamilton get back where it was before the disruption, according to Loomis.

"For us here in Hamilton we're sort of halfway there," he said. "Now we've just got to clear the steel tariffs and aluminum tariffs … then Hamilton can get back to its regularly scheduled renaissance."