President Donald Trump has announced a sharp increase in tariffs on Canadian imports, raising duties on steel and aluminium products to 50% in response to Ontario’s decision to impose a 25% tax on electricity exports to the United States.
The measure, which will take effect on March 12, comes as part of a broader trade strategy aimed at countering what Trump describes as unfair Canadian trade practices.
According to a post on Trump’s Truth Social platform, the US President has instructed his Commerce Secretary to implement an additional 25% tariff on Canadian metals.
The move follows Ontario’s decision to increase energy prices for parts of New York, Michigan, and Minnesota, a policy that Ontario Premier Doug Ford has vowed to maintain until all US tariffs on Canadian imports are removed.
Declaration of Energy Emergency
Trump has also announced plans to declare a national emergency in the energy sector for areas impacted by Ontario’s tax.
“Canada must immediately drop their Anti-American Farmer Tariff of 250% to 390% on various US dairy products, which has long been considered outrageous. I will shortly be declaring a National Emergency on Electricity within the threatened area,” he stated.
Potential Tariff Hike on Canadian Automobiles
The US President warned that if Canada does not remove what he calls “long-standing unfair tariffs,” he will “substantially increase” tariffs on Canadian automobile imports by April 2, which he claims could have a devastating impact on the country’s auto industry.
“If these egregious tariffs are not lifted, we will significantly increase tariffs on cars imported from Canada, effectively bringing an end to its automobile industry,” Trump wrote.
Financial Market Reaction
Trump’s latest trade actions have already sent ripples through financial markets. The benchmark S&P 500 index dropped nearly 1%, while the Toronto Stock Exchange’s S&P/TSX Composite index declined by 0.5%. The Canadian dollar also weakened against the US dollar, reflecting investor concerns over the economic fallout from the escalating trade dispute.
Broader 25% tariffs on all steel and aluminium imports to the US, including those from Canada, Brazil, Mexico, and South Korea, are set to take effect on March 12. Trump has stated that these levies will be applied “without exceptions or exemptions” as part of his strategy to support the struggling US metals industry.
Impact on US-Canada Trade Relations
Trump’s tariff escalation is expected to strain US-Canada trade relations further, adding to ongoing disputes over steel, aluminium, dairy, and automotive trade. His focus on protectionist trade policies has raised concerns among economists, with recent surveys suggesting that the chaotic implementation of tariffs could increase recession risks across North America.
Many analysts worry that additional tariffs could dampen business confidence and consumer spending, potentially slowing economic growth in both countries.
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