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But he said Algoma is already in the midst of “aggressive” cost cuts as it copes with the fallout of the ongoing trade war.

“The implementation of tariffs on Canadian steel and aluminum imports has introduced even more uncertainty into the North American steel market,” Garcia told analysts as the company reported its latest quarterly results.

“Given the deeply integrated North American supply chain, we believe rational dialogue will prevail between these two close allies, restoring normal steel trade between Canada and the U.S.”

This week’s events painted a more turbulent picture, however.

A day before U.S. President Donald Trump’s steel and aluminum tariffs — a 25 per cent levy on all American imports of each material — were to kick in Wednesday, he threatened to slap Canada with double those levies. Trump said that was in response to Ontario implementing a 25 per cent surcharge on energy exports to the U.S.

The day ended with Ontario Premier Doug Ford backing off from the export tax, and Trump’s 25 per cent tariffs on Canadian steel and aluminum coming into force Wednesday.

Canada countered Trump’s move with 25 per cent tariffs on $29.8 billion worth of American goods, which took effect just after midnight Thursday.

The federal government also said it will prioritize investments in projects that primarily use Canadian steel and aluminum as part of its response.

The support may come too late for some. Last week, 30 workers were laid off at Ivaco, a steelmaker in the eastern Ontario village of L’Orignal, United Steelworkers said. 

It added that another round of layoffs is set to begin. 

“Today, more than 120 people received notices of temporary, one-week layoffs to begin next week,” the union said in a statement Wednesday.

“The company has indicated the tariffs and lack of orders are why we’re getting these job losses and work disruptions,” said Éric Fournier, president of the union local representing 225 workers in Ivaco’s rod mill — one of three company mills in L’Orignal — including the 120 affected employees.

Ivaco, Canadian-owned until 2004, has been run for the last two decades by American aerospace and electronics company Heico Corp.

Garcia said that although he expects the tariffs to pose a “significant challenge” for Algoma, the company could have an opportunity to increase sales in the domestic market as Canadian imports of U.S. steel decline.

He said about 3.5 million tonnes of U.S. steel have entered the Canadian market over the past 12 months.

“That gives us a great opportunity with the tariffs that the Canadian government announced (Wednesday) to go out and capture more market share and more plate sales in Canada,” said Garcia, noting Algoma had been in discussions with potential buyers since the tariffs kicked in.

“To the extent that the defence spending and shipbuilding starts to ramp up in the Canadian market, we see that as a great opportunity, especially if the government implements ‘buy Canadian’ requirements for that build.”

On Wednesday, the Sault Ste. Marie, Ont., company reported a net loss of $66.5 million in its latest quarter ended Dec. 31, compared with a loss of $84.8 million a year earlier. Its net loss per diluted share was 61 cents, down from a net loss of 78 cents per share during the same period the previous year.

Garcia said the result reflected “the continued challenging conditions across global steel markets, particularly due to tariff uncertainty, which led to lower realized prices during the quarter.”

In addition to trade war tensions, he said steel pricing and customers’ buying behaviour were also affected by U.S. election uncertainty and interest rate concerns.

“Softer realized steel prices and higher costs more than offset higher shipments, leading to an overall decline in revenues,” said Garcia.

This report by The Canadian Press was first published March 13, 2025.

Companies in this story: (TSX:ASTL)