Removal of steel tariffs good news for Windsor area, Zekelman Industries

Tuesday, May 21, 2019

The Windsor Star/Trevor Wilhelm


The removal of crippling U.S. tariffs against Canadian steel and aluminum will mean a better competitive edge and hope for survival for local companies caught in the middle of a year-long trade war.

“This is huge. This is a tremendous, tremendous event,” Alfie Morgan, professor emeritus of business at the University of Windsor, said about the end of the trade dispute. “Thank God it happened. It was the last thing we needed. This will give us a nice shot in the arm.”

Canada, Mexico and the U.S. reached a deal Friday that will eliminate the 25-per-cent tariffs against Canadian and Mexican steel, which President Donald Trump imposed last June, citing national security concerns.

Canada will also end its retaliatory duties on U.S. steel, aluminum and other products.

From the smallest companies to the biggest industry players in Essex County, the dispute triggered increased costs, loss of investment and uncertainty about the future.

CEO Barry Zekelman of Zekelman Industries, which owns Atlas Tube in Harrow, previously said the tariffs were costing his company $10 million a quarter.

The billionaire, and his large donations in support of Donald Trump, were profiled in a New York Times story on Monday.

Catherine Cobden, president of the Canadian Steel Producers Association, said the U.S. tariffs have cost the Canadian industry more than $1 billion.

“That obviously had been unsustainable and resulted in some job losses, some loss of investments in the industry as well,” she said. “We are simply overjoyed that those tariffs have been removed.”

She said removal of the tariffs caused a “big sigh of relief.”

“We’re going back to the way that we have done business for many years,” said Cobden. “You’ll appreciate coming from Windsor that the steel industry is very integrated with the U.S., as is the auto industry. We see steel travelling back and forth across the border in an integrated nature with our different customers. So this is really critical that we get back to that business and start enjoying the free trade experience that we’ve had for many years with the United States.”

Zekelman Industries, North America’s largest independent steel tube and pipe manufacturer, will see benefits on both sides of the border.

Along with Atlas Tube in Harrow, the company owns 15 other steel product manufacturers in the U.S.

The lobbying efforts of Zekelman were the focus of Monday’s New York Times story.

Zekelman, along with other company representatives, did not respond Tuesday to the Windsor Star’s requests for comment.

He has long lobbied to stem the tide of steel tube imports into the United States from other countries — except for Canada, the home of his largest manufacturing plant in Harrow. The deal reached Friday means the company can ship its locally made product into the U.S. tariff free.

The New York Times reported that Zekelman funded his own advertising campaign and used “well-placed connections” to gain access to Washington decisionmakers and those close to Trump.

The paper also reported that Zekelman donated $1.75 million to a group supporting the president, “skirting or possibly violating a ban on contributions by foreigners.”

The lobbying efforts led to Zekelman and his wife having a private dinner last spring with the president and his son, Donald Trump Jr., according to the New York Times.

Zekelman, a Canadian, told the Times that the donation was legal because the final decision came from his board members, who are American citizens or legal U.S. residents. He also said the money was donated through the Zekelman Industries subsidiary Wheatland Tube, which is based in the U.S.