U.S. President Donald Trump said Tuesday that he will double the tariff on steel and aluminum imports coming from Canada in response to Ontario's surcharge on electricity exports to the United States.
Trump said 50 per cent tariffs will be placed on Canadian steel and aluminum on Wednesday. In a post on social media, he called Canada "ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD."
Trump 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."
On Monday, Ontario placed a 25 per cent surcharge on electricity exports, hitting about 1.5 million homes in three U.S. states.
“We will not back down. We will be relentless,” Premier Doug Ford said during an appearance on MSNBC Tuesday. “I apologize to the American people that President Trump decided to have an unprovoked attack on our country.”
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 the Canada-United States-Mexico Agreement on trade, also called CUSMA.
The White House has said the steel and aluminum tariffs will stack on top of any other duties that Trump introduces in April, meaning those tariffs could increase to 75 per cent.
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.
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 miniscule 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 harken back to 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 against 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.
