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In a dramatic escalation of trade tensions between the United States and Canada, President Donald Trump has announced that tariffs on Canadian steel and aluminum will be doubled from 25% to 50%. The decision comes as a retaliatory measure against Ontario’s recent imposition of a 25% surcharge on electricity exports to several U.S. states.
Taking to Truth Social to make the announcement, Trump accused Canada of being “one of the highest tariffing nations anywhere in the world.” He stated: “Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to ad [sic] an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA.”
The new tariffs are set to take effect on the morning of Wednesday, March 12, intensifying economic uncertainty and fueling concerns over the possibility of a U.S. recession. Trump also reignited tensions by once again threatening to make Canada the 51st U.S. state, a remark that has drawn sharp criticism from Canadian officials.
“Will not back down”
Ontario Premier Doug Ford responded swiftly, stating that Canada “will not back down” and urging American business leaders to intervene. Speaking to MSNBC, Ford warned of potential countermeasures, including a complete halt to U.S. energy imports from Canada. “We will be relentless,” he said. “We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”
The tariff announcement has sent shockwaves through financial markets. On Monday, following Trump’s refusal to rule out a recession in a Fox News interview, the Nasdaq suffered its worst day since September 2022, plunging 4%. The sell-off continued into Tuesday, with the Dow dropping 1.2% and declines recorded across the S&P 500 and Nasdaq. Analysts warn that further instability in trade policy could deepen market uncertainty and dampen business confidence.
The scheduled meet
Trump is scheduled to meet with the Business Roundtable, an influential group of corporate leaders including CEOs from Google, Amazon, and JPMorgan. The group has previously voiced support for policies aimed at strengthening American manufacturing but has urged the administration to uphold the benefits of the U.S.-Mexico-Canada Agreement (USMCA), signed in 2020.
Meanwhile, recent surveys highlight growing concerns among both business leaders and consumers about the economic climate under Trump’s presidency. A report published by Chief Executive magazine on Monday revealed that CEO confidence in the current business climate dropped 20% in January, reaching its lowest level since spring 2020. Consumer confidence has also taken a hit, with the Conference Board’s February report recording its steepest month-to-month decline since August 2021.
As the new tariffs take effect, economic experts and political analysts are closely watching how both nations navigate this escalating trade dispute and whether further retaliatory measures will be implemented.
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