Stelco cuts expose domino effect of tariffs through supply chain: Experts

Industry experts say the latest round of layoffs in Ontario’s steel belt highlights the ripple effects of U.S. tariffs as their impact reverberates through Canada’s manufacturing supply chain.

Stelco Holdings Inc. on Monday said it was laying off up to 500 workers at its Hamilton and Lake Erie facilities, with the company citing the ongoing trade crisis, weak demand and continued import pressure.

The job cuts are the latest in a string of tariff-linked layoffs in the province and come after plans for more than 1,000 job cuts at Algoma Steel in Sault Ste. Marie and the closure of ArcelorMittal’s Hamilton wire-drawing mill.

Alan Arcand, chief economist at Canadian Manufacturers and Exporters, says the decline in Canadian steel demand reflects the way tariffs are working their way through highly integrated manufacturing supply chains. 

He says companies that use steel are losing U.S. sales and cutting production, which in turn reduces the amount of steel they buy from Canadian producers.

Brendan Sweeney, president and chief executive of the Pacific Manufacturing Association of Canada, said Honda and Toyota are still producing at steady levels in Canada and continue to buy significant volumes of Canadian steel, suggesting the weakness in Stelco’s domestic demand may be coming from other manufacturers or different parts of the auto sector.

Stelco called the layoffs “unfortunate but necessary” to ensure its survival, noting U.S. tariffs have significantly shrunk the market for its cold-rolled and galvanized products.

The end users for those products can include automotive and parts manufacturers, machinery and fabricated metal producers, appliance makers, and construction and electrical equipment manufacturers.

This report by The Canadian Press was first published Sept. 29, 2026.

By Brett Bundale | Copyright 2026, The Canadian Press. All rights reserved.