Steel Tariffs

Article written in collaboration with Vanessa Jodoin, Vice President, Legal Affairs & Steel Purchasing

Since the announcement that a 25% tariff could be imposed by the United States on all steel imports, questions have arisen about the potential impact on AGF and the industry as a whole. Today, I would like to share our analysis of the situation.

A Global Market in Motion

These U.S. protectionist measures will have a worldwide impact, not just on the Canadian industry, as they introduce significant uncertainty and disrupt the balance of the global steel market. We anticipate an increase in the price of reinforcing steel, a trend that has already begun due to rising costs across the international steel supply chain.

Facing These Challenges

The direct impact of these tariffs on AGF remains limited.

While we make some minor steel purchases from the United States, our main suppliers are based in Canada, meaning we do not expect a direct impact on our purchase prices. However, the situation may be different for our competitors. This could lead to increased demand for Canadian steel, which in turn may impact pricing.

Additionally, if Canada retaliates by imposing sanctions on imports, as it did in 2018, the steel supply could tighten further, adding additional pressure on the market.

Our Measures to Mitigate the Impact

At AGF, we have anticipated this situation as much as possible, including increasing our inventories to secure a greater portion of our order book and limit the immediate effects of price increases. This strategy helps us protect our commitments to clients and maintain our competitiveness.

Furthermore, our vision of operational excellence and our strong financial health provide us with the flexibility to navigate market fluctuations.

Despite this uncertain context, our Canadian operations remain strong. Our backlog indicates a busy summer ahead. Our activities and jobs are secure, and we continue to advance our strategic development.

Staying Vigilant

We will keep you informed of any new announcements from the Canadian or U.S. governments that could impact our industry.

In the meantime, we are closely monitoring market trends and will adjust our strategies as needed to continue supporting our clients successfully, despite external challenges.