Trump drops plan to double tariffs on Canadian metals after White House talks, but trade tensions remain
Ontario Premier Doug Ford announced a temporary suspension of his province’s planned 25 percent surcharge on electricity exports to the United States following discussions with US Commerce Secretary Howard Lutnick.
According to CNBC, the move came after US President Donald Trump threatened to double tariffs on Canadian steel and aluminum imports from 25 percent to 50 percent.
Ford stated that he and Lutnick had a “productive conversation about the economic relationship between the United States and Canada,” leading to the decision to put the surcharge on hold.
“We have both agreed, let cooler heads prevail,” Ford told reporters.
Ford’s surcharge was initially a response to Trump’s tariffs on Canadian imports. He had vowed to impose the 25 percent surcharge on electricity exports to Michigan, New York, and Minnesota.
Earlier in the day, Ford remained firm on Ontario’s position, saying, “We will not back down. We will be relentless.”
Speaking on MSNBC, he apologized to Americans for what he called an “unprovoked attack” on Canadian jobs and families.
On CNBC’s “Money Movers,” he warned that if Trump “continues to hurt Canadian families,” he would not hesitate to shut off Ontario’s electricity exports to the US.
Trump’s escalation of the tariff dispute came early Tuesday morning when he announced via Truth Social that he would impose an additional 25 percent tariff on Canadian steel and aluminum, bringing the total to 50 percent.
He cited Ontario’s electricity surcharge as the reason.
Trump stated that due to Ontario, Canada, imposing a 25 percent tariff on electricity exported to the United States, he directed the Secretary of Commerce to increase tariffs on steel and aluminum imports from Canada to 50 percent.
He described Canada as one of the highest tariff-imposing nations globally.
However, later in the day, White House trade adviser Peter Navarro confirmed to CNBC that Trump would no longer implement the additional tariffs.
“Correct,” Navarro responded when asked whether the 50 percent tariffs were off the table. He credited Lutnick’s negotiations, stating, “He did a beautiful job negotiating that.”
Despite Trump’s reversal on the additional tariffs, the White House confirmed that the original 25 percent tariff on steel and aluminum imports would take effect at midnight Wednesday with “no exceptions or exemptions.”
Additionally, Trump stated that a 25 percent tariff on other Canadian imports would begin April 2.
White House spokesperson Kush Desai said, “President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people.”
Trump’s tariff announcement triggered immediate market volatility. The Dow Jones Industrial Average dropped more than 500 points, the S&P 500 fell by 0.8 percent, and the Nasdaq Composite declined by 0.4 percent.
Investors were already concerned about the economic impact of Trump’s trade policies, and the new tariffs fueled further recession fears.
Ford had earlier warned that Trump’s actions could push both countries into economic decline.
“There’s one person to be blamed if we go into a recession, it will be called the Trump recession,” he told CNBC.
The tariff dispute is part of broader US-Canada trade tensions. Trump has repeatedly floated the idea of Canada becoming the “Fifty First State” and used the trade war to reinforce that message.
In his Truth Social post on Tuesday, he wrote, “This cannot continue. The only thing that makes sense is for Canada to become our cherished Fifty First State.”
He claimed that this would eliminate tariffs and lower taxes for Canadians.
Outgoing Canadian Prime Minister Justin Trudeau has strongly opposed Trump’s trade policies, accusing him of attempting to weaken Canada to make annexation easier.
The ongoing dispute has led to calls within Canada to boycott US products, while political leaders have denounced Trump’s economic policies.
Trump also announced plans to declare a “National Emergency on Electricity” to address what he called an “abusive threat” from Canada.
He further warned that unless Canada lifted “long-time egregious tariffs” on US goods, he would “substantially increase” tariffs on auto imports, a move he claimed would “essentially, permanently shut down the automobile manufacturing business in Canada.”
Following the discussions between Ford and Lutnick, Ford confirmed he would travel to Washington, DC, on Thursday to meet with Lutnick and US trade representative Jamieson Greer.
The meeting will focus on renegotiating a renewed United States-Mexico-Canada trade agreement.
As the tariff conflict continues, the upcoming talks will determine whether US-Canada trade relations stabilize or if further economic retaliation follows.
