Trump backtracks on doubling steel, aluminum tariffs after Ford suspends electricity surcharge

U.S. President Donald Trump has backtracked on his move to double tariffs coming into effect on Wednesday on Canadian steel and aluminum to 50 per cent after Ontario Premier Doug Ford agreed to suspend an electricity surcharge to three states.

The White House confirmed in the afternoon that “a 25 per cent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12.”

Trump’s latest tariff escalation came earlier Tuesday as he blasted Ford for imposing a 25 per cent surcharge on electricity exported from the province to Michigan, Minnesota and New York.

On Tuesday, Ford said he’ll suspend the surcharge after speaking with U.S. Commerce Secretary Howard Lutnick and agreeing to meet with him in Washington, D.C., on Thursday.

The premier added he was confident the U.S. President would “pull back,” on the steel and aluminum tariffs announced Tuesday, but added “I’m not speaking for the President.”

Meanwhile, prime minister-designate Mark Carney has said he will keep Canadian retaliatory tariffs in place until “Americans show us respect” and commit to free trade again.

Carney was reacting after U.S. President Donald Trump has announced the doubled tariffs which Carney called an attack on Canadian workers and businesses.

Carney met Monday with the Liberal caucus and outgoing Prime Minister Justin Trudeau, a day after he won a landslide victory in the Liberal leadership contest.

He is expected to be sworn in as prime minister before the end of the week.

Ford meeting with Lutnick

Ford said he and Lutnick have agreed to meet to “discuss a renewed” Canada-United States-Mexico Agreement (CUSMA) ahead of Trump’s April 2 reciprocal tariff deadline. 

Markets have been in turmoil since Trump launched — and partly paused — a trade war with Canada and Mexico last week.

Trump signed an executive order last Thursday delaying until April tariffs on goods that meet the rules-of-origin requirements under CUSMA.

Canadian officials have said Trump’s ultimate goal is to weaken the Canadian economy in order to annex the country.

“I’m not too sure why he continues to attack his closest friends and allies, but we need the American people to speak up,” Ford said.

Trump says Canada will pay a ‘financial price’

Trump said Canada will pay a “financial price” after vowing Tuesday to double the tariff in response to Ontario’s surcharge on electricity exports to the United States.

“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 posted on social media.

The president also called on Canada to immediately drop duties on dairy and other “long time tariffs” and threatened to “essentially, permanently shut down the automobile manufacturing business in Canada” with tariffs in April.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump said.

The president said that annexation would end the tariffs and what he called the “Northern Border” problem, adding “the artificial line of separation drawn many years ago will finally disappear.”

Trade war escalation

The president’s initial tariffs were linked to the flow of deadly fentanyl across the border — but U.S. government data shows the volume of drugs crossing the northern border is minuscule compared with the amounts crossing the border with Mexico.

Trump also has complained about Canadian defence spending and trade, and has often misrepresented Canada’s dairy market policy.

Canada uses “tariff rate quotas,” which place a limit on the quantity of a product that can be imported at a lower tariff rate. Under CUSMA, most importers don’t pay those high tariffs on Canadian dairy.

Canada’s Ambassador to the U.S. Kirsten Hillman told NewsNation Monday that 99 per cent of products traded between the two nations are tariff-free.

Trump’s duties on steel and aluminum recall similar actions taken under his first administration.

During negotiations on CUSMA, Trump used his national security powers to impose a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports in March 2018. It affected all countries that sell into the U.S.

The day after announcing those levies, Trump posted on social media that “trade wars are good, and easy to win.”

Canada and other countries introduced their own duties on the U.S. in response.

Nearly a year later, the White House announced a deal had been reached with Canada and Mexico, ending the trade dispute.

Economists have said Trump’s initial tariffs on steel and aluminum were costly. A report by the Washington-based Tax Foundation said companies were forced to pay higher prices, U.S. exports dropped and the duties resulted in the loss of about 75,000 manufacturing jobs.

The Peterson Institute for International Economics found that each job saved in steel-producing industries came at a high cost to consumers — roughly $650,000 per job.

About a quarter of all steel used in the United States is imported and Canada is the largest supplier, accounting for nearly 25 per cent of all U.S. steel imports in 2023. Canada is also the United States’ largest source of aluminum.