LNG Canada turns to Chinese steel as tariffs choke domestic suppliers

LNG Canada says because Canadian suppliers are unable to make what it needs, it once again plans to use Chinese steel in its $33-billion Phase 2 expansion project in Kitimat, B.C. The decision underscores mounting pressures on Canada's industrial capacity and the paradox facing major projects: domestic steel producers are cutting jobs while major infrastructure initiatives cannot source their needs locally.

The Supply Chain Dilemma

• The expansion of its pipeline network, however, has set a 70 per cent target for Canadian steel, indicating efforts to source domestically where possible
• The reliance on Chinese steel comes as Canadian steelmakers face tariff pressures that have reduced production capacity
• LNG Canada's decision reflects the practical reality that tariff-protected Canadian suppliers cannot scale production or meet specialized requirements

This situation exemplifies broader challenges facing Canada's resource sector. Major projects designed to generate employment and export revenue are forced to look abroad for materials, while domestic capacity shrinks. The contradiction illustrates how trade tensions create unintended consequences: job losses at home coupled with lost domestic procurement opportunities.

For expats in resource sectors: If you work in oil, gas, mining, or heavy manufacturing, understand that supply chain shifts may reshape hiring and relocation patterns. Companies adapting to tariffs may shift operations or consolidate workforces. Stay informed about your sector's import restrictions and domestic sourcing mandates, as they directly affect employment stability and project timelines.

Sources

• CBC News — LNG Canada to use Chinese steel on $33B expansion project