Trump withdraws threat of double tariffs on Canadian metals in dispute over electricity

President Donald Trump said Tuesday he would double tariffs on Canadian steel and aluminum to 50%, escalating a trade war that has contributed to a falling stock market in recent days.

Later Tuesday, Trump withdrew that threat following a negotiation between Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford that led to Ford dropping a surcharge on electricity from the province sold into three U.S. states.

In a Tuesday morning post to his social media platform, Truth Social, Trump said he instructed Lutnick to put the additional tariffs into effect Wednesday. The move was a response to Ontario imposing a 25% surcharge on electricity sold to Minnesota, Michigan and New York state, Trump said.

“Why would our Country allow another Country to supply us with electricity, even for a small area?” Trump wrote in a follow-up post. “Who made these decisions, and why? And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!”

Trump also called on Canada to reduce tariffs on U.S. dairy products. He threatened that if Canada does not drop those and other long-standing tariffs, he would impose further tariffs on imported cars April 2.

“If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada,” he wrote. “Those cars can easily be made in the USA!”

Electricity surcharge

Ford announced the electricity surcharge Monday. He said the move was in response to Trump’s imposition last week of 25% tariffs on Canadian metals, which the U.S. president later suspended.

The electricity surcharge would cost electricity consumers in the three states up to $400,000 per day, Ford said.

Ford criticized Trump for an aggressive stance on tariffs and said last-minute suspensions did little to repair the damage created by the U.S. president’s threats.

“It’s hurting families on both sides of the border,” Ford said. “It needs to end. That’s why I’m being crystal clear: Until these tariffs are off the table, until the threat of tariffs is gone for good, Ontario will not relent.”

He said the province would “apply maximum pressure to maximize our leverage” and threatened to shut off the supply of Ontario electricity if the trade war continues.

Ford did relent, though, according to the White House press office.

“After President Trump threatened to use his executive powers to retaliate with a colossal 50 percent tariff against Canada, Ontario Premier Doug Ford spoke with Secretary Lutnick to convey that he is backing down on implementing a 25 percent charge on electricity exports to the United States,” White House spokesman Kush Desai said in a statement.

Traders react

U.S. stock markets recorded their worst trading day of the year Monday – and continued to fall Tuesday morning – amid concern about the economic impacts of Trump’s tariff threats.

In his Tuesday morning posts, Trump also repeated a call for Canada to join the United States as the 51st state, saying that would solve any problem stemming from U.S. tariffs and provide the country of 40 million people with military security and reduced taxes. He noted that the U.S. subsidizes Canada’s military.

“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.”