President Donald Trump has decided to hold off on increasing tariffs on Canadian steel and aluminum imports from 25% to 50%. This comes after Ontario, the Canadian province, suspended a planned 25% surcharge on electricity exports to the United States.
The tariff threat had been made earlier in the day, with Trump posting on social media that he would double the tariffs on Canadian metals in response to Ontario's price hikes on electricity.
He stated, "I have instructed my Secretary of Commerce to add an additional 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA."
However, Ontario Premier Doug Ford acted quickly to remove the surcharge. Following a call from US Commerce Secretary Howard Lutnick, Ford confirmed that Ontario would freeze the price hikes.
He expressed confidence that this move would convince Trump to back down on his tariff increase. "He has to bounce it off the president, but I'm pretty confident he will pull back," Ford said.
The tariff escalation, which could have had significant economic consequences for both countries, was averted thanks to the quick action by Ontario.
However, Trump's planned 25% tariff on steel and aluminum imports from Canada will still go into effect on March 12, BBC said.
Donald Trump ordered to increase duties on Canadian steel and aluminum to 50% and did not rule out the introduction of new restrictions, and also again proposed that Canada become the 51st state of the United States - to resolve the issue with duties
— Sprinter Observer (@SprinterObserve) March 11, 2025
Trump also promised that he… pic.twitter.com/OOIxEYY8ls
Trump Suggests Canada Should Join the US to End Trade Tensions and Tariffs
The US president has long used tariffs as a tool in trade negotiations. In his social media posts, Trump referred to tariffs as a critical mechanism for altering the US economy, regardless of market volatility.
While Trump views tariffs as necessary for changing trade dynamics, they have raised concerns among US businesses and markets.
The tension between the US and Canada over trade has been ongoing, with Trump criticising Canada for trade imbalances and what he perceives as unfair tariffs on American goods.
According to AP, He even suggested that Canada should become part of the United States to eliminate all tariffs. "The only thing that makes sense is for Canada to become our cherished Fifty First State," Trump said.
Despite Trump's combative stance, Ontario's decision to freeze electricity charges for US customers could provide a temporary resolution. Still, Canada is expected to announce retaliatory tariffs, including new duties on US products.
Incoming Canadian Prime Minister Mark Carney has already stated that his government will keep tariffs in place until the US shows respect for free trade principles.
This ongoing trade dispute, combined with concerns over potential recession risks, has created unease in global markets. As the stock market continues to fluctuate, businesses like Icarus Brewing in New Jersey worry about rising costs due to uncertainty over tariffs.
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