Donald Trump has announced a significant escalation in the trade war between the US and Canada, doubling tariffs on Canadian steel and aluminum from 25% to 50%.
This move is in retaliation for Ontario’s 25% surcharge on electricity exports to several US states.
In a statement on Truth Social on Tuesday, Trump declared, “Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into 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.”
Effective March 12
The tariffs are set to take effect on Wednesday, March 12, and Trump has again threatened to make Canada the 51st US state.
- The U.S. president has given a variety of explanations for his antagonism toward Canada, saying that his separate 25% tariffs are about fentanyl smuggling and voicing objections to Canada’s high taxes on dairy imports that penalize U.S. farmers.
- But he continued to call for Canada to become part of the United States as a solution, a form of taunting that has infuriated Canadian leaders
- The latest announcement has sparked concerns about a recession in the US, with the White House attempting to downplay the anxiety on Wall Street.
- The US stock market has responded negatively to the news, with the Nasdaq experiencing its worst day since September 2022, dropping 4%.
The sell-off continued into Tuesday morning, with the Dow dropping 1.2% and the S&P 500 and Nasdaq also declining.
What you should know
- In response to Trump’s new tariffs, Ontario Premier Doug Ford stated, “We will be relentless… We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”
- Ford has previously threatened to cut off the US energy supply from Canada in response to Trump’s tariffs.
- The U.S. president condemned the use of electricity “as a bargaining chip and threat,” saying in a separate social media post on Tuesday that Canada “will pay a financial price for this so big that it will be read about in History Books for many years to come!”
Trump was set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that during the 2024 campaign he wooed with the promise of lower corporate tax rates for domestic manufacturers.
But his tariffs on Canada, Mexico, China, steel, aluminum — with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.
