Some steel manufacturers in Canada and Mexico have informed their customers of the decision to reject new orders to the United States amid the possibility that President Donald Trump will reinstate tariffs. Specifically, the Canadian company Stelco has stopped offering sales quotes to consumers in the U.S., according to sources close to the matter. Meanwhile, steel suppliers based in Mexico have also ceased accepting orders awaiting possible actions from Trump, according to Flack Global Metals, a major buyer in the industry.
Trump has threatened tariffs of 25% on Mexico and Canada, announcing plans to implement these tariffs starting February 1. Although both countries were exempted from the 25% tariffs imposed by the U.S. during Trump's first administration, there is growing concern in the sector about the potential lack of exemption for metal.
"There is a lot of uncertainty and changes in trade policy by Mexican steel manufacturers regarding their approach to this market," said Jeremy Flack, CEO of Flack Global Metals, an Arizona-based steel distributor, regarding the current situation. "They are imbalanced because of this. They have gone from being worried to not being worried and now back to being worried again," he added.
Canada is the largest supplier of steel to the U.S., while Mexico ranks as the third-largest supplier, according to data from the Department of Commerce. In 2023, the United States consumed around 91 million tons of steel, with imports accounting for approximately 27% of that total demand, according to research from Morgan Stanley.
Cleveland-Cliffs Inc., the U.S.-based parent company of Stelco, has not immediately responded to requests for comment. The mentioned company, as the second-largest steel producer in the United States, reached an agreement last year to acquire the Canadian company Stelco. Lourenco Goncalves, CEO of Cleveland-Cliffs, when asked last week about the possibility of tariffs on the recently acquired Canadian steel, stated that they will follow Trump's policies. "President Trump will do what he wants. I bought Stelco knowing it is in Canada. And you know what? 'America first'. He has a plan, and I will play according to that," he concluded.
