BJK Financial Group Blog

I grew up in Sault Ste. Marie, not far from Algoma Steel, so the domestic steel industry is a part of who I am. As a financial advisor, my role is to help clients stay informed—and grounded—when turbulent economic policy impacts Canadian markets. Recent U.S. tariff hikes on Canadian steel, aluminum, and related goods have certainly sparked concern—so let me walk you through what has happened, how Ottawa is responding, and what this means for Sault Ste. Marie, Algoma Steel, and broader Canada.

What happened: U.S. tariff escalation

On August 1, 2025, former U.S. President Donald Trump signed an executive order increasing tariffs on Canadian goods from 25 percent to 35 percent, particularly targeting imports not covered under USMCA, and even imposing 40 percent duties on transshipped goods routed through third parties. This is in addition to a doubling of steel and aluminum tariffs from 25 percent to 50 percent earlier in June 2025

While the tariffs don’t apply to goods compliant with USMCA, key Canadian export sectors—including steel, aluminum, lumber and autos—have been hit hard. Canadian businesses face sharply reduced access to U.S. markets, uncertainty around future trade policy, and elevated cost risk.

Algoma Steel: the local impact

Algoma Steel, headquartered in Sault Ste. Marie, has felt the brunt of these changes. Its CEO, Mike Garcia, confirmed that the U.S. market is effectively closed because of the 50 percent tariffs on steel and aluminum exports. The company has applied for $500 million in support under Ottawa’s Large Enterprise Tariff Loan facility (LETL) to help offset prolonged uncertainty and liquidity challenges.

Algoma acknowledges government negotiators are working “actively” to find a fair, durable trade resolution—including regular feedback on what may support their operations.

Canadian government response: measured and multifaceted

1. Retaliatory tariffs and quotas

Following the March steel/aluminum tariff round, Canada imposed 25 percent retaliatory tariffs on U.S. vehicles and other goods. For items affected by ongoing disputes, Ottawa set tariff‑rate quotas aligned with 2024 import volumes—importing countries beyond that threshold face 50 percent duties. Prime Minister Carney also warned of additional counter‑measures if no agreement is reached by a July‑21 deadline, emphasizing flexibility depending on progress.

2. Suspension of selective tariffs

On April 15, 2025, Ottawa announced a suspension for six months of retaliatory tariffs on key U.S. imports critical to Canadian manufacturing, healthcare, food processing, national security, and public safety. Automakers who continue production in Canada were exempted from punitive tariffs.

3. Financial support: LETL facility

To assist larger companies facing trade-related liquidity pressures—including Algoma Steel—Canada launched the Large Enterprise Tariff Loan facility in March 2025. It provides bridge financing to eligible firms while trade talks continue.

4. Engagement and negotiation

Prime Minister Mark Carney has adopted a diplomatic yet firm posture—negotiating directly with U.S. counterparts, calling for a renegotiated trade deal and rejecting unilateral tariff actions. In a meeting with Trump, Carney stated, “Canada will never be for sale,” and insisted only a fair, durable agreement is acceptable.

How successful have these efforts been?

Positive indicators

1. Financial relief in motion: Algoma Steel’s application to LETL and other firms' enrolment in government supports show that Ottawa’s financial tools are actively helping companies ride out near‑term uncertainty.
2. Diplomatic traction: Cancelling auto tariff deadlines and negotiating through crisis, Carney’s leadership appears to have paused the worst-case expansion of tariff rounds—for now staying trade escalation from spiraling further.
3. Limited domestic fallout from exemptions: Suspension of select retaliatory tariffs—especially for automakers and manufacturing inputs—has softened the blow to domestic suppliers.

Lingering challenges

1. Industry dissatisfaction: Canadian steel producers have stated government measures “aren’t enough” to prevent job losses or stop steel dumping from other nations. Indeed, roughly 1,000 jobs in steel have been lost since tariffs began.
2. Continued closures of U.S. market: Algoma reports that export access remains blocked—meaning government supports are a lifeline, not a long‑term solution.
3. Trade talks remain fragile: Negotiations with the U.S. remain “chaotic” and one‑sided, with no guarantee of comprehensive agreement by deadlines; investment decisions and supply‑chain adjustments continue to be delayed.

Looking ahead: balancing optimism with realism

As a financial advisor—and someone personally invested in our community—I remain cautiously optimistic. Ottawa has moved swiftly to cushion the immediate fallout: targeted tariff suspensions, liquidity support programs, and measured diplomacy. For Algoma Steel, that means meaningful engagement and financial relief are available, and capacity to pivot toward domestic demand and new markets is growing—but challenges remain real.

Clients should consider:

• Diversification: Firms and investors exposed to steel or auto supply chains may reduce reliance on U.S. markets and seek new domestic or global customers.
• Government advocacy: Continued feedback loops between companies like Algoma and Ottawa will be critical in avoiding gaps in support.
• Monitoring trade deadlines: Immediate pressure points include any remaining U.S. deadlines for new deals post‑August 1, 2025—including the potential imposition of yet more tariffs.

Conclusion

In summary, the U.S. has sharply escalated tariffs—doubling to 50 percent for metals and raising some categories to 35 percent—placing pressure on Canadian exporters, especially steel producers like Algoma in Sault Ste. Marie. The Canadian government has responded with a mix of retaliatory duties, strategic suspensions, liquidity support, and diplomacy under Prime Minister Mark Carney. These efforts have provided valuable relief and a framework for negotiations, but structural risks remain. As your financial advisor, I remain hopeful yet vigilant: the path forward will depend on continued government responsiveness, corporate adaptability, and successful resolution of negotiations with the U.S.

Source materials

On August 1, 2025 tariff increase to 35 percent: ir.algoma.com+4Global News+4Delta Optimist+4 The Guardian[Reuters+4The Guardian+4 CTVNews+4|https://urldefense.com/v3/__https://www.theguardian.com/us-news/2025/jul/31/trump-canada-tariffs-order?
Doubling of metal tariffs to 50 percent in June 2025: TIME axios.com AP News
Algoma Steel comments and funding request: Global News, Delta Optimist
Canadian government support measures, quotas, and LETL: Reuters, Global News TT News canadianmanufacturing.com
Industry criticism and job impact: Reuters AP News