President Trump’s crippling tariffs forced the Sault steelmaker to exit the U.S. market<\/p>\n
U.S. President Donald Trump cost Algoma\u00a0Steel Group Inc. $225 million in direct tariff costs in 2025.<\/p>\n
“The unprecedented 50 per cent tariff implemented in June fundamentally broke the cross-border business model that Canadian producers, including Algoma, had built over decades,” Algoma CEO Rajat Marwah\u00a0told institutional investors during a conference call on Wednesday.<\/p>\n
“The consequences extended well beyond the U.S. border, creating an oversupply of coil in Canada and driving domestic transactional price as much as 40 per cent\u00a0below comparable U.S. levels across many categories,” Marwah said.<\/p>\n
Trump signed an executive order on Feb. 1,\u00a0levying\u00a025 per cent tariffs on exports of Canadian steel and other products.<\/p>\n
On June 4, he proclaimed\u00a0U.S. tariffs on aluminum, steel\u00a0and their derivatives would be hiked to 50 per cent.<\/p>\n
“For the full year, besides the impact of lower pricing, we absorbed $225 million in direct tariff costs,” Marwah said today.\u00a0<\/p>\n
“These are not cyclical headwinds. They represent an unprecedented structural shift that required a structural response. Our fourth quarter financial results reflect that reality. Lower shipments, elevated costs and continued pressure on realized pricing as the Canadian market absorbed excess supply. Shipments to the U.S. were approximately 30 per cent\u00a0lower than the average U.S. sales over the previous three\u00a0quarters\u00a0as we began our exit from the U.S. market.”<\/p>\n
As SooToday reported yesterday, the Sault steelmaker posted net losses of almost $1 billion in 2025<\/a>,\u00a0$365 million of that during the quarter ended on Dec.\u00a031.<\/p>\n But Algoma has completed its historic transition to electric arc furnace (EAF) steel-making technology.<\/p>\n “Our operational pivot is not a plan. It is underway,” Marwah said.\u00a0<\/p>\n “Our blast furnace and coke oven operations have been wound down. Our first EAF unit is running on a full 24-hour schedule and our second unit remains on schedule. Our strategic focus is now squarely on delivering high-value products for the Canadian market.”<\/p>\n “This is a meaningful signal of Algoma’s emerging role as a critical partner in Canada’s defence and industrial supply chain. Taken together, these actions reflect our deliberate strategic repositioning. We are moving away from our historical model as a cross-border commodity producer and towards something more focused, more resilient and more aligned with Canada’s long-term industrial priorities.”<\/p>\n “By concentrating on rolled and heat-treated plate products, along with selected coil products for the domestic market, we are optimizing for margin quality rather than volume, deepening customer partnerships and reducing our exposure to tariff distorted global markets.”<\/p>\n Marwah\u00a0pointed to Algoma’s plate mill as a major competitive advantage.\u00a0<\/p>\n “As Canada’s only producer of discrete plate, we are not subject to the same oversupply dynamics that are compressing coil pricing. Demand for plate products across infrastructure, construction and defence remains healthy, and we expect trade production to increase sequentially as our EAF ramps through 2026. This is exactly the market position we are leaning into,” he told investors.<\/p>\n “The Q1 power system and other critical process components are operating reliably on a full 24-hour per day schedule, a significant milestone from where we were just one\u00a0quarter ago.”<\/p>\n As of Dec.\u00a031, Algoma had spent a total of $920 million on the EAF transition.<\/p>\n The final bill is expected to be about\u00a0$987 million.<\/p>\n “We\u00a0are evolving from a cross-border commodity producer to a Canadian-focused steel supplier with lower cost, lower emissions and greater long-term resilience,” Marwah said.<\/p>\n