Trump halts doubling of tariffs on Canadian metals after Ontario suspends electricity price hikes
Business
Trump suggested Tuesday that tariffs were critical for changing the US economy
WASHINGTON (AP) — President Donald Trump ‘s threat Tuesday to double his planned tariffs on steel and aluminum from 25% to 50% for Canada led the provincial government of Ontario to suspend its planned surcharges on electricity sold to the United States.
As a result, White House trade adviser Peter Navarro said the U.S. president pulled back on his doubling of steel and aluminum tariffs, even as the federal government still plans to place a 25% tariff on all steel and aluminum imports starting Wednesday.
The drama delivered a win for Trump but also amplified concerns about tariffs that have roiled the stock market and stirred recession risks. Tuesday’s escalation and cooling in the ongoing trade war between the United States and Canada only compounded the rising sense of uncertainty of how Trump’s tariff hikes will affect the economies of both countries.
Trump shocked markets Tuesday morning, saying the increase of the tariffs set to take effect Wednesday was a response to the 25% price hike that Ontario put on electricity sold to the United States.
“I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump posted on Truth Social.
Ontario Premier Doug Ford said Tuesday afternoon that U.S. Commerce Secretary Howard Lutnick called him and Ford agreed to remove the surcharge. He said he was confident that the U.S. president would also stand down on his own plans for 50% tariffs on Canadian steel and aluminum.
“He has to bounce it off the president but I’m pretty confident he will pull back,” Ford said on Trump’s steel and aluminum tariff threat. “By no means are we just going to roll over. What we are going to do is have a constructive conversation.”
After a brutal stock market selloff Monday and further jitters Tuesday, Trump faces increased pressure to show he has a solid plan to grow the economy. So far the president is doubling down on tariffs and can point to Tuesday’s drama as evidence that taxes on imports are a valuable negotiating tool, even if they can generate turmoil in the stock market.
Trump suggested Tuesday that tariffs were critical for changing the U.S. economy, regardless of stock market gyrations.
The U.S. president has given a variety of explanations for his antagonism of Canada. He has said that his separate 25% tariffs on all imports from Canada, some of which are suspended for a month, are about fentanyl smuggling and objections to Canada putting high taxes on dairy imports that penalize U.S. farmers. He also continued to call for Canada to become part of the United States, which has infuriated Canadian leaders.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump posted Tuesday. “This would make all Tariffs, and everything else, totally disappear.”
