U.S. Steel Giant Posts US$165 Million Profit, Praises American Trade Rules While Pressing Ottawa Over Stelco

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American steel giant Cleveland-Cliffs is celebrating a financial turnaround while intensifying its dispute with Ottawa over the future of Canadian steel production.

On October 19, 2026, the Ohio-based company reported a third-quarter net profit of US$165 million, reversing earlier losses as stronger steel prices and favourable American trade policies improved its performance. Chief executive Lourenco Goncalves praised the U.S. trade environment but argued that Canada’s protections for its own steel industry remain inadequate.

The conflicting outlooks are particularly visible at Stelco, the Canadian steelmaker Cleveland-Cliffs acquired in 2024. Although the company says Stelco just delivered its strongest quarter under American ownership, it is proceeding with layoffs affecting potentially hundreds of Ontario workers.

The dispute has now escalated into a confrontation over legally binding employment commitments, with the Canadian government examining measures that could include court action or even a forced sale.

Cleveland-Cliffs Returns to Profit With a US$165 Million Quarter

Cleveland-Cliffs reported consolidated revenue of US$5.6 billion for the three months ending September 30, 2026, alongside net income of US$165 million. The result marks a substantial improvement from its US$234-million net loss during the same period in 2025 and its US$134-million loss in the second quarter of 2026. The company also recorded adjusted earnings before interest, taxes, depreciation and amortization, known as EBITDA, of US$612 million. That was more than double the US$286 million recorded during the preceding quarter, reflecting improving conditions for the American steel producer.

Steel shipments reached approximately 4.2 million net tons, while the average selling price increased to US$1,177 per net ton from US$1,032 a year earlier. Cleveland-Cliffs described the period as its strongest quarter in three years. Importantly, the US$165-million figure represents consolidated net income, while US$152 million was attributable to Cleveland-Cliffs shareholders after accounting for noncontrolling interests. For investors, the results suggest that stronger prices, improved operations and a more favourable trading environment are beginning to reverse an extended period of financial pressure. For Canadian workers, however, the company’s improving profitability raises difficult questions about continued job reductions at Stelco.

Trump’s Steel Tariffs Receive Strong Praise From Cleveland-Cliffs

Cleveland-Cliffs chief executive Lourenco Goncalves credited American trade enforcement with creating stronger conditions for domestic steelmakers. During the company’s October 19 earnings call, he argued that restrictions on foreign steel imports have helped American producers obtain better prices, secure longer-term contracts and maintain higher production levels. He specifically praised the Trump administration’s approach, arguing that a strong domestic steel industry requires protection against foreign competitors selling steel at unfairly low prices. The company’s financial recovery provides evidence of improving business conditions, although it does not independently establish how much of that improvement resulted directly from tariffs.

The contrast with Canada is significant. Washington increased its Section 232 tariffs on imported steel to 50% in June 2025, creating major obstacles for Canadian producers selling into their traditional American market. Cleveland-Cliffs benefits from stronger protection for its U.S. operations while its Canadian subsidiary faces restricted access to the same market. Goncalves maintains that stronger trade barriers have benefited American steel production and investment. Canadian manufacturers, however, must contend with the possibility that policies helping the company’s American mills can simultaneously weaken demand for steel produced at Stelco’s Ontario facilities.

The Company Predicts More Than US$4 Billion in Earnings for 2027

Cleveland-Cliffs’ financial outlook became considerably more optimistic alongside its third-quarter results. Management expects adjusted EBITDA of approximately US$715 million in the fourth quarter of 2026, followed by more than US$4 billion during 2027. Goncalves said improved contracts with customers and favourable steel-price expectations were central to that projection. The company also reported US$3.2 billion in available liquidity at the end of September and outlined plans to reduce debt through stronger cash generation and proceeds from property sales. These figures suggest management sees the recovery extending well beyond one profitable quarter.

The forecast requires an important qualification. Adjusted EBITDA measures operating performance before several major expenses and adjustments, so the projected US$4 billion should not be confused with net profit. The company also faces uncertainty involving raw-material costs, steel prices and the broader manufacturing economy. Nevertheless, Cleveland-Cliffs is preparing to capitalize on stronger American demand. It has delayed a major blast-furnace refurbishment at its Burns Harbor, Indiana, operation until April 2028 to preserve production capacity. The contrast is difficult to overlook: the company expects to maintain more American output while simultaneously reducing certain steel-processing activities in Canada.

Stelco Delivers Its Strongest Quarter Under American Ownership

Despite the confrontation with Ottawa, Cleveland-Cliffs reported a significant improvement at Stelco during the third quarter. Goncalves described it as the Canadian subsidiary’s strongest quarter since the American company acquired it in 2024. He said improved conditions in the Canadian hot-rolled steel market helped Stelco become a positive contributor to adjusted EBITDA. The turnaround follows an extended period during which Stelco struggled with weak demand and unfavourable trading conditions. Canada introduced stronger steel import controls during 2025 and 2026, measures that Cleveland-Cliffs credits with improving the domestic market for hot-rolled products.

However, the company’s results reveal important differences within the steel industry. Hot-rolled steel, widely used in manufacturing and industrial applications, has experienced improving demand and prices. Galvanized steel, which receives a protective zinc coating to resist corrosion, continues to face what Cleveland-Cliffs describes as excessive supply in Canada. The company argues that imported material is undermining the viability of its Hamilton coating operations. According to Goncalves, the galvanized business accounts for less than 20% of Stelco’s production. Cleveland-Cliffs therefore intends to concentrate on stronger-selling hot-rolled products, even though doing so means suspending operations that support specialized Canadian manufacturing jobs.

Up to 500 Stelco Workers Face Layoffs Across Southern Ontario

The improving financial results have not stopped Cleveland-Cliffs from proceeding with a restructuring that could affect up to 500 Canadian employees. Stelco announced plans in late September to indefinitely idle cold-rolling and coated-steel operations at Hamilton Works. Layoff notices began reaching workers in October, with United Steelworkers representatives estimating that approximately 330 Hamilton employees could be affected over several weeks. Additional reductions are expected at Lake Erie Works in Nanticoke, where union representatives have warned that between 40 and 50 workers could face layoffs as early as October 24. The final number affected will depend partly on reassignment opportunities.

For workers and their families, the uncertainty extends beyond the loss of a regular paycheque. Many employees have spent years developing specialized skills in steel production, and comparable industrial jobs are not necessarily available nearby. Cleveland-Cliffs describes the layoffs as temporary and says workers can return when commercial conditions improve. The company also maintains that focusing on hot-rolled production will preserve approximately 2,000 other Canadian jobs. Union representatives question whether the proposed reductions are justified, particularly when Cleveland-Cliffs is reporting stronger financial results and openly supporting the American trade policies affecting Canadian steel producers.

The 2024 Stelco Takeover Included Legally Binding Job Commitments

When Cleveland-Cliffs announced its acquisition of Stelco in July 2024, the transaction carried an enterprise value of approximately US$2.5 billion, equivalent to roughly C$3.4 billion at the time. Ottawa approved the takeover in October 2024 after reviewing the transaction under the Investment Canada Act. That approval came with several binding undertakings extending for five years. Among the most significant was a commitment to maintain at least the same number of unionized employees and the vast majority of non-unionized employees as existed when the acquisition was announced.

The obligations extended beyond employment levels. Cleveland-Cliffs also agreed to maintain Stelco’s headquarters in Hamilton, honour collective agreements and pension commitments, undertake significant capital investments and preserve certain environmental standards. Those promises were central to Ottawa’s conclusion that foreign ownership would provide a net benefit to Canada. Now, less than two years after the acquisition closed, the proposed layoffs have placed those commitments under intense scrutiny. The government argues that Cleveland-Cliffs may have failed to satisfy its obligations. The company disputes responsibility for the market conditions behind the reductions, setting up a potentially significant legal confrontation over how binding investment promises should be enforced during an international trade dispute.

Ottawa Is Considering Court Action and Even a Forced Sale

Industry Minister Mélanie Joly has taken an increasingly confrontational position toward Cleveland-Cliffs. On October 16, she said the federal government was examining its options under the Investment Canada Act, including measures that could ultimately force changes in ownership. Joly argued that the company had breached multiple commitments made during its acquisition of Stelco. The legislation allows Ottawa to demand compliance with investment undertakings and, if the required legal conditions are met, seek enforcement through the courts. Potential remedies include orders requiring compliance, financial penalties and divestiture of Canadian business interests.

A forced sale should not be confused with an immediate government takeover. Section 40 of the Investment Canada Act establishes a court process, and a judge must assess whether the statutory requirements for an order have been satisfied. Nationalization would raise additional questions involving ownership, compensation and the government’s role in operating a steel producer. Labour representatives and some political leaders have raised the possibility of public ownership, but no takeover had been completed or formally ordered as of October 19. The dispute therefore remains an unresolved confrontation involving corporate obligations, workers’ rights and Canada’s authority to enforce the conditions attached to foreign acquisitions.

Canada’s Steel Industry Has Lost Much of Its American Export Market

The Stelco dispute is unfolding against a severe disruption to Canada’s steel trade with the United States. According to figures from the Canadian Steel Producers Association reported by Reuters on October 16, Canadian steel shipments to the American market plunged approximately 60% during 2025. Before the escalation in tariffs, around 90% of Canadian steel exports went to the United States. The decline has forced domestic producers to seek customers elsewhere, reduce production or change the types of products they manufacture. For companies that built their operations around cross-border supply chains, replacing American demand has been especially difficult.

There are signs of adaptation. United Steelworkers estimates indicate that Canadian-made steel accounted for approximately 51% of steel consumed domestically in 2025, compared with 41% in 2024. Increased investment in energy infrastructure, mining and other industrial projects has supported demand, particularly in Western Canada. Ottawa has also offered financial assistance and promoted greater use of Canadian steel in domestic projects. However, the recovery has been uneven. Some manufacturers benefit from additional Canadian orders while others remain highly exposed to American tariffs. Stelco’s difficulties illustrate why improving national demand figures do not automatically translate into stability at every individual plant.

Cleveland-Cliffs Wants Canada to Build a More Protected Steel Market

Goncalves has repeatedly promoted a strategy he calls “Fortress North America,” aimed at strengthening steel production in Canada and the United States while restricting imports from other countries. During the October 19 earnings call, he argued that Canada’s existing tariff-rate quota system had significantly improved Stelco’s hot-rolled steel business but had failed to protect galvanized production. He maintained that Canada’s market cannot sustain domestic output from both Stelco and ArcelorMittal Dofasco alongside the volume of imported galvanized steel currently entering the country. Cleveland-Cliffs wants Ottawa to reduce that competition before its Hamilton operations can reopen.

Canada has already implemented extensive measures against imported steel. For certain products from countries without a free trade agreement, tariff-free import quotas have been reduced to 20% of their 2024 levels. A separate 75% threshold applies to eligible non-CUSMA free trade partners, with a 50% surtax imposed when applicable quotas are exceeded. The government also maintains additional measures targeting specified Chinese steel and other steel products. Cleveland-Cliffs argues that these restrictions have not gone far enough for galvanized steel. Ottawa must balance such demands against the needs of Canadian manufacturers that purchase steel as an input, making the issue more complicated than simply imposing another tariff.

The Future of Stelco Now Depends on Trade Rules, Jobs and Legal Commitments

Cleveland-Cliffs enters the final months of 2026 with a much stronger financial outlook than it had earlier in the year. Its American operations are benefiting from higher selling prices, improving contracts and trade protections that management expects to support substantial earnings growth in 2027. Stelco is also contributing positively to the company’s financial performance, according to its latest results. Yet those improvements have not resolved the commercial problems surrounding galvanized steel or the dispute over employment commitments. Cleveland-Cliffs says affected employees can be recalled once market conditions justify restarting the idled operations, but it has not announced a firm reopening date.

Ottawa faces equally difficult decisions. Stronger import restrictions could support domestic producers, while aggressive enforcement of the Investment Canada Act could challenge the ownership arrangements established only two years earlier. A broader Canada–U.S. steel agreement might reopen commercial opportunities, but negotiations do not guarantee immediate relief. For workers in Hamilton and Nanticoke, the most meaningful measures of progress will be recalled employees, functioning production lines and dependable long-term orders. Cleveland-Cliffs’ US$165-million quarterly profit demonstrates that the company’s financial recovery is underway. Whether that recovery ultimately extends to the Canadian employees whose jobs remain uncertain is the question neither stronger American earnings nor political promises have yet answered.

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