The United States has imposed tariffs on Canadian steel imports so consistently that they have become an expected cost of doing business across the border. Canada’s response is to accept this new reality and adapt. Product upgrading, differentiation, and market diversification now stand at the core of Canada’s long-term strategy for competing in the global market.

For more than a century, the Canadian steel industry has lived in the shadow of U.S. trade policy. Nowhere is this clearer than at Algoma Steel in Sault Ste. Marie, Ontario. Since its founding in 1901, in the aftermath of the Panic of 1893, Algoma has been shaped, constrained, and often battered by waves of American tariffs and trade restrictions that have repeatedly disrupted its access to markets.

In its early years, Algoma was built with the expectation that cross-border trade would fuel its growth. The Great Lakes offered an efficient shipping route to American industrial centers, and U.S. demand for steel appeared boundless. But Washington’s early protectionist policies meant Algoma could not compete freely in that market. Tariff barriers sharply reduced the company’s potential exports, stunting its expansion and forcing Algoma to depend more heavily on Canadian customers and government contracts.

The interwar period brought some of the most punishing trade restrictions. The Smoot-Hawley Tariff Act of 1930 dramatically raised U.S. duties on a wide range of imports, including steel. For Algoma, this came at the worst possible time—when global demand collapsed during the Great Depression. Exports to the United States dried up, leaving the mill to survive on limited domestic consumption and later on government-driven wartime demand.

After World War II, trade liberalization efforts through the General Agreement on Tariffs and Trade (GATT) appeared to open a new chapter. But for steel, protectionism never truly disappeared. In the 1960s and 1970s, the U.S. imposed quotas and “voluntary restraint agreements” designed to limit the volume of imported steel. For Algoma, this created chronic instability. Planning production became difficult, and the company was forced to cut back operations and lay off workers whenever quotas tightened.

The 1980s and 1990s brought another wave of trade disputes. U.S. steel producers increasingly turned to anti-dumping and countervailing duty complaints against Canadian and other foreign competitors. Algoma frequently found itself targeted by these actions, which often resulted in new duties on specific products. Each new case disrupted Algoma’s strategy—whether in plate steel, hot-rolled coil, or specialty products—undermining investment and long-term planning.

By the early 2000s, globalization had raised hopes for freer and more predictable trade. Yet the steel sector remained vulnerable. The most dramatic shock came in 2018, when the Trump administration imposed Section 232 tariffs on steel imports under the guise of national security. For Algoma, more than a century old by then, the move was a direct hit. The U.S. was still Canada’s most important export market, and overnight its access was restricted. Algoma’s plate and hot-rolled coil products, in particular, faced higher costs and market uncertainty, forcing the company to idle production lines and trim its workforce.

While Canada negotiated temporary exemptions and retaliated with counter-tariffs, the instability inflicted lasting damage on Algoma’s finances and operations.

Today, Algoma Steel is at another turning point. The company is investing more than $700 million to transition from traditional blast furnace production to electric arc furnace (EAF) technology. This shift represents both a survival strategy and a bid to thrive in a low-carbon future. EAF steelmaking is more flexible, less carbon-intensive, and better aligned with Canada’s climate goals. It also allows Algoma to use recycled scrap steel, reducing dependence on iron ore and coal.

In March 2025 the U.S.reintroduced a 25% Section 232 tariff on Canadian steel. On June 4, 2025 steel tariffs were doubled to 50%.

The EAF investment has the potential to strengthen Algoma’s competitive position. Lower costs, improved efficiency, and reduced emissions could insulate the company somewhat from the volatility of U.S. tariff actions. It also positions Algoma as a leader in low-carbon steelmaking at a time when international buyers are paying closer attention to the carbon footprint of industrial products. European border carbon adjustments, which impose costs on carbon-intensive imports, could actually give Algoma an advantage over producers still reliant on blast furnaces, opening up new export opportunities.

The story of Algoma Steel is not just about furnaces and rolling mills—it is about resilience. The move to EAF steelmaking is the latest chapter in that struggle, a forward-looking investment in efficiency and sustainability. This time, however, the transition also positions Algoma to benefit from global decarbonization policies, such as Europe’s carbon border adjustments, which favor low-emission producers. Still, as history shows, even the most modernized plant cannot escape the reach of U.S. trade policy. Tariffs remain a recurring threat, continuing to harass a company that has stood at the center of Sault Ste. Marie’s economy for more than a century.

Over its long history, Algoma Steel has had to adapt repeatedly to survive these shifting trade winds. It has diversified its product lines, relied on Canadian infrastructure and government support, and modernized its operations to stay competitive. Yet the pattern is unmistakable: every time Algoma gains ground, a new wave of U.S. tariffs or trade cases undermines its footing.

---

Timeline of U.S. Tariffs and Algoma’s Response

• 1901–1920s: Early U.S. tariffs restrict Algoma’s access to its nearest and largest potential market, limiting growth opportunities.
• 1930 (Smoot-Hawley Tariff): Sharp tariff hikes during the Depression devastate exports; Algoma turns to Canadian contracts and later wartime demand.
• 1960s–1970s: U.S. quotas and “voluntary restraint agreements” force Algoma to scale back production and shed jobs.
• 1980s–1990s: A surge of anti-dumping and countervailing duty cases targets Algoma’s product lines, undermining long-term investment.
• 2018 (Section 232 tariffs): Duties on Canadian steel disrupt Algoma’s plate and hot-rolled coil exports, leading to production cutbacks and layoffs.
• March 12, 2025 U.S. imposes 25% tariff on Canadian steel.
• June 4, 2025 tariff doubled to 50%.
• 2020s (EAF transition): Algoma invests in low-carbon electric arc furnaces to improve competitiveness, positioning itself for advantage under European carbon border adjustments but still vulnerable to U.S. tariff risks.