- Donald Trump announced a new 25% tariff on Canadian steel and aluminum on Tuesday then later delayed the order
- The president tied tariff policy to interest in making Canada 51st state in social media posting.
- U.S. investment markets continue to lose value amid ongoing uncertainty.
President Donald Trump took to social media Tuesday to announce his decision to hit back at Canada amid escalating trade tensions by raising the current U.S. levy on steel and aluminum from 25% to 50%.
Trump said the move was in retaliation to a 25% Canadian energy tariff on electricity exports to the U.S.
“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,” Trump wrote in his Truth Social posting. “This will go into effect TOMORROW MORNING, March 12th.”
On Monday, Ontario Premier Doug Ford enacted a new tariff on electricity exported to U.S. users, a move that impacts about 1.5 million customers in Michigan, Minnesota and New York. Ford said the move was in response to U.S. tariff assessments on Canadian goods.
Later in the day, Ford told reporters he was temporarily suspending the 25% surcharge on electricity exported from his province to the U.S. after he and U.S. Secretary of Commerce Howard Lutnick agreed to renewed trade talks, per a report from CNBC.
“We have both agreed, let cooler heads prevail,” Ford said, hours after Trump announced the increase on steel and aluminum imports Tuesday morning.
And shortly after Ford’s tariff retraction, White House trade advisor Peter Navarro told CNBC that Trump would delay the additional 25% tariff on Canadian steel and aluminum pending a meeting between Lutnick and Ford scheduled for Thursday.
Canadian leader apologizes to Americans
At a Monday news conference in Toronto, Ford said he feels “terrible for the American people who didn’t start this trade war” but added that he could increase the surcharge, or even cut off electricity service, in response to further escalations of U.S. trade levies targeting Canada.
During a Tuesday interview with MSNBC, Ford said he was considering a response to Trump’s latest tariff decree but questioned why the U.S. president was sowing chaos.
“We will not back down. We will be relentless,” Ford told MSNBC. “I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs, and it’s unacceptable.”
Ford said he had spoken with Lutnick but called for further discussions on U.S.-Canada trade issues in lieu of continuing a tariff war that is “hurting Canadian families, it’s hurting American families.”
“Let’s work together, let’s get to the table if (Trump) has issues and let’s sort this out,” Ford said. “I’m not too sure why he continues to attack his closest friends and allies.”
Impact on the stock market
The Tuesday tariff news pushed U.S. investment markets down even further after widespread selloffs on Monday drove the tech-heavy Nasdaq composite to its biggest single-day losses since 2022, while the S&P 500 had its worst day so far this year.
Monday’s stock market declines were driven by ongoing uncertainty over U.S. trade policies as well as Trump’s comments alluding to the possibility of a U.S. economic recession.
In his Truth Social posting, Trump also alluded to further increases on Canadian automobile imports on April 2 and revisited his desire to make Canada the 51st state, a move the president said would erase the tariff war.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump wrote. “This would make all Tariffs, and everything else, totally disappear. Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the World will be bigger, better and stronger than ever — And Canada will be a big part of that."
Trump tariff turmoil
Tuesday’s announcements continue the tariff tumult of last week that saw numerous swings in the president’s international trade policy:
- On Monday, Trump announced that a 30-day pause on 25% tariffs targeting goods from Canada and Mexico, first revealed last month, would end on Tuesday.
- Also on Monday, Trump ordered an additional round of 10% tariffs on goods from China, adding to the 10% levy the U.S. imposed last month.
- On Wednesday, Trump circled back with a temporary carveout on his tariff declarations, announcing a new 30-day pause that applied just to automobile industry imports from Canada and Mexico.
- On Thursday, the president followed up by signing a pair of executive orders for selective moratoriums on new tariffs for Mexican and Canadian goods, set to time out on April 2. The latest orders essentially revert trade rules back to the previous guidance under the 2018 U.S.-Canada-Mexico Agreement, a trade pact Trump signed during his first term in office.
- On Friday, Trump added yet another tariff twist, indicating he may issue new levies on certain Canadian products, including a 250% tariff on dairy, a rate he said matches a current Canadian tariff on U.S. dairy imports. “Canada has been ripping us off for years on tariffs for lumber and for dairy products,” he said. Earlier on Friday, the president said he was “strongly considering” imposing new sanctions on Russia, including trade tariffs, until a ceasefire agreement is reached with Ukraine.
Last month, Trump announced a new, industry-specific 25% tariff on steel and aluminum imports and hinted at 25% levies on imported vehicles, pharmaceutical products and computer microchips.
The president also revealed that a global assessment of levies on U.S. exports was underway and was due to be completed by April 1. Findings of that report would guide a new round of reciprocal trade levies, to be announced on April 2, and Trump said that “whatever they charge us, we charge them.”