President Donald Trump on Tuesday announced a sharp increase in tariffs on Canadian steel and aluminum imports, raising them from 25% to 50%.
The move comes in response to Ontario’s recent decision to impose a 25% tariff on its electricity exports to the United States.
Trump, in a post on his Truth Social platform, directed his commerce secretary to implement the new tariffs starting Wednesday morning. He also called on Canada to remove what he described as an “Anti-American Farmer Tariff” on US dairy products, which he claimed ranges from 250% to 390%.
“Also, 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,” Trump wrote.
The president further threatened to increase tariffs on Canadian cars entering the US beginning April 2 if Ottawa does not roll back what he called “egregious” trade barriers.
In response, Ontario Premier Doug Ford pushed back, stating he would not relent until Trump’s tariffs on Canadian imports were removed entirely.
“We will not back down until all of Trump’s tariffs on Canadian imports to the US are gone for good,” Ford posted on X.
The latest escalation in trade tensions rattled financial markets. The benchmark S&P 500 index dropped nearly 1%, reflecting investor fears that the new tariffs could slow US economic growth and drive inflation higher. Canada’s S&P/TSX Composite index also fell 0.5%, while the Canadian dollar weakened against the US dollar.
In addition to the targeted tariffs on Canadian metals, Trump has ordered a broader 25% tariff on all steel and aluminum imports to the US, effective Wednesday. The move eliminates previous exemptions for key trade partners such as Canada, Mexico, Brazil, and South Korea, covering millions of tons of imported metals.
Since taking office in January, Trump’s aggressive trade policies have unsettled markets and raised fears of a potential economic downturn. A small business survey on Tuesday indicated declining confidence for a third consecutive month, erasing the post-election optimism seen after Trump’s victory on November 5.
A recent Reuters poll of economists across North America revealed rising concerns over the impact of US tariffs. Of the 74 experts surveyed, 70 warned that the risk of a recession had increased, with inflationary pressures in the US also on the rise.
As tensions between Washington and Ottawa escalate, businesses on both sides of the border face growing uncertainty, with industries bracing for further economic fallout from the ongoing trade dispute.
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