A trade fight designed in part to encourage American manufacturing is producing a strikingly different result at one Buffalo-area factory. Welded Tube USA, the American division of Canadian steel-pipe producer Welded Tube, says it has eliminated about 25 jobs at its Lackawanna, New York, operation after moving some production to Canada to avoid retaliatory tariffs. The development offers a ground-level look at how quickly cross-border industrial strategies can change when tariffs collide with supply chains built around the assumption that goods can move repeatedly between Canada and the United States.
For Welded Tube, the issue is particularly complicated because its American and Canadian operations were designed to work together. Steel, unfinished pipe and finished products can move between facilities on opposite sides of the border, making new duties much more consequential than they might be for a manufacturer operating entirely within one country.
Welded Tube Says Tariffs Forced the Production Shift
The immediate impact became public on September 22, when Welded Tube USA plant manager Steve Vanasky joined Western New York manufacturers discussing the consequences of the latest U.S.-Canada trade dispute. Vanasky said the Lackawanna operation had shifted some production into Canada to avoid Canadian retaliatory tariffs and had reduced its workforce as a result. According to his account, roughly 25 American jobs have been lost. Buffalo Toronto Public Media independently reported the same explanation from the company.
That distinction matters. Welded Tube has not announced that the Lackawanna plant is closing or that all American production is moving north. Rather, the company says tariff costs have changed the economics of where certain work is performed. For employees affected by the restructuring, however, that distinction offers little immediate comfort. A policy decision made at the national level has translated into fewer positions at a factory in Lackawanna, a former steelmaking centre where industrial employment remains economically and symbolically important.
This Factory Was Designed Around a Cross-Border Production Line
Welded Tube’s manufacturing footprint helps explain why the company is particularly sensitive to new border costs. Its Lackawanna facility was commissioned in 2013 and is capable of producing as much as 350,000 tons annually. The 109,000-square-foot mill produces oil-country tubular goods, including casing used by the energy industry. Welded Tube says casing manufactured there is intended for additional processing at the company’s heat-treatment and threading operation in Welland, Ontario.
In other words, crossing the border is not an unusual detour in this supply chain; it is part of the normal production process. Earlier Canadian government records documented the same arrangement, describing Welded Tube of Canada as importing welded “green tubes” from its Lackawanna operation for finishing in Canada. That system made commercial sense when steel and semi-finished products could move relatively predictably between the two countries. Once tariffs are added at different stages, however, geography becomes a cost issue. A company can suddenly save money by keeping Canadian-bound work in Canada even if American machinery and workers are available to do it.
Steel Is Caught in a Much Broader U.S. Tariff Regime
The pressure on Welded Tube comes amid significant changes to U.S. metal tariffs. In April 2026, the Trump administration established Section 232 duties reaching 50% on many steel, aluminum and copper articles, arguing that stronger protection was necessary for national security and domestic industrial capacity. The tariff system was modified again in June, including special rules for qualifying Canadian and Mexican products and different rates depending on product classification and U.S. content.
The administration’s stated objective is to encourage more metal production and sourcing inside the United States. That can benefit domestic primary-metal producers when imported material becomes more expensive. Welded Tube illustrates a different side of the equation. A company may operate an American factory while simultaneously depending on Canadian steel, Canadian processing facilities and Canadian customers. In that situation, tariffs do not simply divide “American producers” from “foreign producers.” They can change costs inside a single North American company’s internal manufacturing network, influencing which plant receives the next production run.
Canada’s Retaliatory Tariffs Changed the Calculation Again
Canada added another layer on September 8, 2026, when counter-tariffs of 15%, 25% and 50% took effect on a list of U.S.-origin goods. The Canadian government said the measures covered C$27.6 billion worth of American imports and targeted sectors including steel, aluminum, agricultural equipment, appliances, electronics and other products. Rates were designed to correspond with U.S. tariff treatment on targeted Canadian goods.
For a manufacturer such as Welded Tube, retaliatory tariffs can create an unexpected incentive. Production performed at the American facility may face an additional cost when the resulting goods enter Canada. Moving Canadian-market production to a Canadian facility can therefore reduce exposure to those duties. That is the mechanism Vanasky described when explaining the Lackawanna job losses. It is also why the situation cannot be understood simply as a Canadian company choosing Canada over the United States. The firm’s plants were already interconnected. What changed was the relative cost of moving products across the border, and management responded by changing where some work was performed.
Tariffs Can Protect One Manufacturer While Raising Costs for Another
There is an important economic tension behind the Lackawanna story. Tariffs can provide domestic steelmakers with protection from lower-priced imports and encourage customers to purchase more U.S.-made metal. The U.S. International Trade Commission found that the Section 232 measures operating from 2018 through 2021 reduced affected steel imports by approximately 24%, raised U.S. steel prices by about 2.4% and increased domestic steel production by roughly 1.9%. The USITC estimated U.S. steel output was $1.3 billion higher in 2021 because of those measures.
But the same federal study found costs further down the manufacturing chain. Industries consuming steel and aluminum faced higher input prices, with production among the most affected downstream industries estimated to be 0.6% lower on average. The USITC calculated that output in those industries was about $3.5 billion lower in 2021 because of Section 232 tariffs. Those historical findings do not prove that today’s tariff structure will produce identical results. They do demonstrate why the policy can create gains and losses simultaneously—and why a steel-related company such as Welded Tube can find itself on both sides of the equation.
Western New York Has More at Stake Than 25 Positions
The dispute matters particularly in Western New York because Canada is woven deeply into the regional manufacturing economy. At the September 22 event, Rep. Tim Kennedy’s office said New York manufacturers exported more than $482 million in aluminum and aluminum articles to Canada during the previous year, along with about $254 million in iron and steel products. Local manufacturers also described uncertainty itself as a problem because companies quoting contracts must estimate what their material costs will be months into the future.
That uncertainty can influence investment before it appears in official employment statistics. A company considering another production line, larger warehouse or additional shift may delay the decision until tariff rules become clearer. Welded Tube’s 25 lost positions provide a tangible example, but the larger concern for the Buffalo region is whether businesses begin restructuring future capacity around avoiding the border. That possibility carries particular weight in an area where economic-development agencies have spent years marketing proximity to Southern Ontario as an advantage for manufacturers rather than a liability.
Welded Tube Went Through a Remarkably Similar Disruption in 2018
The current episode has a historical precedent inside the same company. When U.S. steel tariffs were imposed on Canada in 2018, Welded Tube executives told Canada’s House of Commons trade committee that the Lackawanna mill had previously used Canadian steel to manufacture unfinished tubing before sending it to Ontario for additional processing. The company testified that tariffs forced it to reroute Canadian-market production, reduced Lackawanna capacity utilization from about 75% to 50% and resulted in layoffs.
Contemporary reporting documented temporary shutdowns and additional employment disruptions at the plant as management tried to reduce the cost of repeatedly crossing the tariff barrier. After the earlier U.S.-Canada metal tariffs were removed, Welded Tube’s Canadian leadership discussed rebuilding production in Lackawanna. The repetition is noteworthy: the underlying industrial logic of the company has changed far less than trade policy has. Its Ontario and New York operations remain geographically close and operationally connected, meaning tariff barriers can repeatedly encourage work to be reorganized on one side of the border or the other.
The Bigger Question Is Whether Production Comes Back
Whether the approximately 25 positions return will depend on what happens to tariffs, Canadian countermeasures and the company’s order book. Welded Tube has not publicly announced a timetable for restoring the eliminated jobs. For now, the company’s decision shows how quickly manufacturers can reconfigure production when cross-border costs rise. Once companies establish new production routines, supplier relationships and customer arrangements, reversing them may require more than simply removing a tariff.
The scale of the broader economic relationship makes those decisions significant. U.S. Trade Representative data show that U.S.-Canada goods trade reached roughly $715.5 billion in 2025, including $333.6 billion in American exports to Canada and $381.9 billion in imports. Census Bureau figures show another $439 billion-plus in two-way goods trade during the first seven months of 2026 alone. For Welded Tube’s Lackawanna employees, however, the consequences are already much less abstract. About 25 positions have disappeared, according to management, while work that once supported the Buffalo-area plant is now being performed north of the border.
