Canada folded to President Donald Trump after he vowed the nation would pay a historically big ‘financial price’ for the electricity tariff it imposed on the United States.
Hours later, Ontario Premier Doug Ford said he would cancel the 25% tariff on Canadian electricity to Michigan, New York and Minnesota that he put in place on Monday.
That move was an escalation in response to earlier tariffs from Trump as the trade war between the two countries has intensified.
The Premier said he spoke with Commerce Secretary Howard Lutnick about the situation and they agreed to meet on Thursday to discuss reciprocal tariffs that Trump wants to put in place on April 2.
‘In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota,’ Ford said.
Trump, in response, agreed not to double tariffs on Canadian steel and aluminium to 50%. They will stay at 25%.
He reiterated his call for Canada to join the United States.
‘Canada should honestly become our 51st state. we wouldn’t have a northern border problem. We wouldn’t have a tariff problem,’ Trump added.
‘Canada would be great as our cherished 51st state. You wouldn’t have border problems. You wouldn’t have anything.’
Earlier Tuesday Trump declared a national emergency on electricity in the United States and doubled the tariffs on aluminum and steel from Canada after Ford enacted the electricity tariff.
The president, in a lengthy post on his Truth Social account, also threatened to ‘permanently shut down’ the Canadian auto sector.
In response to the tariff tit-for-tat, the stock market dropped over 500 points as nervous investors worry about a potential recession.
Trump told reporters he wasn’t worried about the selloff.
‘Nope, doesn’t concern me. I think some people are going to make great deals by buying stocks and bonds and all the things they’re buying. I think we’re going to have an economy that’s a real economy, not a fake economy,’ he said.
Earlier Tuesday, Trump was furious about Canada’s electricity tariff. White House economic adviser Peter Navarro said Trump’s threat to increase tariffs was a ‘negotiating tactic.’
‘Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to add an additional 25% Tariff, to 50%, on all steel and aluminimum coming into the United States from Canada, one of the highest tariffing nations anywhere in the world,’ Trump declared.
‘I will shortly be declaring a National Emergency on Electricity within the threatened area,’ he added.
Trump’s fury continued in a second post to his Truth Social account, where he warned Canada will pay a historically big ‘financial price’ for its electricity tariff. Many states in the Northeast buy supplemental energy from Canada.
‘Why would our Country allow another Country to supply us with electricity, even for a small area? Who made these decisions, and why? And can you imagine Canada stooping so low as to use electricity, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!,’ Trump raged.
The president spent much of Tuesday hammering America’s northern neighbor.
He also warned more auto tariffs are coming on April 2nd. He wants Canada to drop its retaliatory tariffs on U.S. dairy and agricultural products.
‘If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada,’ he said.
He closed with an offer to drop all tariffs if Canada agrees to become the 51st state of the United States.
‘The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear,’ he wrote.
The markets have shown their unhappiness with Trump’s economic decisions.
On Monday, there were fears a recession would be sparked when the markets tanked, resulting in Nasdaq Composite’s biggest loss since 2022.
There are more targets on Canada.
Canadians who are in the United States for 30 days or longer will soon have to register their information with the United States government, ABC News reported.
They also will have to fingerprinted starting on April 11, according to a new government rule, which is expected to be posted on the federal register Wednesday.
Trump’s ramp up of the trade war with Canada comes after Ottawa’s retaliation to U.S. tariffs imposed last week.
He’ll get a chance to defend his latest round of tariffs when he speaks to the Business Roundtable, a trade association of CEOs, on Tuesday evening.
He has argued his tariffs are a transition but also wouldn’t rule out a potential recession.
‘I hate to predict things like that,’ Trump said on Fox News Channel’s Sunday Morning Futures
‘There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of — it takes a little time. It takes a little time. But I don’t — I think it should be great for us. I mean, I think it should be great.’
While Trump has said the tariffs are focused on stopping fentanyl trafficking into the United States, they have had a quick impact on the stock market and economy.
Continuing his combative rhetoric towards Canada since retaking office, Trump this week accused outgoing Prime Minister Justin Trudeau of using the drama surrounding their tariff war to try and ‘stay in power.’
Trudeau announced his resignation in January, but in an explosive call on Wednesday between the two leaders, Trump claimed he tore into his northern counterpart.
‘Justin Trudeau, of Canada, called me to ask what could be done about Tariffs. I told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped,’ Trump wrote on Truth Social.
‘He said that it’s gotten better, but I said, ‘That’s not good enough.” he went on.
On Sunday, Mark Carney was elected the new head of Canada’s Labor Party, putting him in line to be the next prime minister.
He vowed to take on Trump.
‘America is not Canada, and Canada never, ever, will be part of America in any way, shape or form,’ he said in his victory speech.
‘We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.’
