President Donald Trump’s threat to increase his planned steel and aluminium tariffs on Canada from 25% to 50% has prompted the provincial government of Ontario to halt its planned surcharges on power sent to the US.
As a result, White House trade advisor Peter Navarro said the U.S President reversed his decision to double steel and aluminium tariffs, despite the fact that the federal government still intends to impose a 25% duty on all steel and aluminium imports beginning Wednesday.
The drama resulted in a victory for Trump, but it also heightened concerns about tariffs, which have roiled the stock market and raised recession risks.
Tuesday’s escalation and cooling in the ongoing trade war between the United States and Canada exacerbated the growing sense of anxiety about how Trump’s tariff increases will effect both countries’ economies.
Trump surprised markets Tuesday morning, claiming that the tariff increase, which goes into effect Wednesday, was in response to Ontario’s 25% price increases on power delivered to the United States.
Ontario Premier Doug Ford said Tuesday afternoon that U.S. Commerce Secretary Howard Lutnick called him and Ford agreed to remove the surcharge. He said he was confident that the U.S. President would also stand down on his own plans for 50% tariffs on Canadian steel and aluminium.
Trump suggested Tuesday that tariffs were critical for changing the U.S. economy, regardless of stock markets.
The U.S. President has given a variety of explanations for his antagonism of Canada.
He has said that his separate 25% tariffs on all imports from Canada, some of which are suspended for a month, are about fentanyl smuggling and objections to Canada putting high taxes on dairy imports that penalize U.S. farmers.
He also continued to call for Canada to become part of the United States, which has infuriated Canadian leaders.
Following Trump’s threat of catastrophic financial devastation, incoming Canadian Prime Minister Mark Carney stated that his government will maintain tariffs until Americans demonstrate respect and agree to free trade.
Carney, who will be inaugurated in as Justin Trudeau’s replacement in the coming days, said Trump’s new tariffs are an attack on Canadian workers, families, and businesses.
Canadian officials intend to impose retaliatory tariffs in response to Trump’s targeted steel and aluminum levies. They are likely to be announced on Wednesday.
