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United States President Donald Trump’s tariffs are creating “challenging conditions” for global steel markets, says Algoma Steel Group Inc.’s chief executive Michael Garcia, and that was reflected in the company’s first-quarter results swinging to a loss.

The Sault Ste. Marie, Ont.-based steelmaker had a $24.5-million net loss for the three months ending March 31, compared to a profit of $28 million during the same period last year.

Algoma attributed the loss to lower pricing due to weakening market conditions and an increased cost of sales, primarily due to higher tariff costs as well as natural gas and electricity pricing.

“In many cases, it is not feasible to pass on the tariff cost to customers,” the company said in a release on Tuesday.

The cost of tariffs was $10.5 million in the first quarter, it said. But this only covers the period between March 12 — when Trump imposed a 25 per cent tariff on steel imported into the U.S. — to the end of March, so the cost is likely to “increase materially” in the next quarter, BMO analyst Katja Jancic said in a note.

The tariffs and Canadian trade policy led to “lower realized pricing and higher production costs,” Garcia said on a conference call on Wednesday. There is also uncertainty in both the U.S. and Canadian markets as customers “adjust purchasing patterns in anticipation of supply disruptions,” he said.

He also said the trade chaos impacted the U.S. dollar exchange rate, which has influenced the company’s raw material cost.

The company also announced a slight delay in its electric arc furnace project due to unusually harsh winter conditions. It now expects to produce the first steel from the project sometime during the second quarter as opposed to in April. The project is expected to reduce the company’s carbon footprint.

Nevertheless, Garcia said he was optimistic that the new Canadian government would work constructively with steel industries to “advance timely solutions” that strengthen the company and the economy.

“With trade relationships evolving, we believe it is critical that the government immediately engage with the United States to address the Section 232 tariffs currently in place,” he said, referring to the tariffs placed on steel products. “Resolving these issues is essential to ensuring a level playing field for Canadian steel producers.”

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Algoma’s first-quarter revenue decreased to $517.1 million compared to $620.6 million a year. The operating loss was $139.9 million compared to income of $3.1 million in the same quarter last year.