U.S. President Donald Trump said on Tuesday he has instructed his commerce secretary to put an additional 25 per cent tariff on all steel and aluminum coming into the United States from Canada, bringing the total tariff on those products to 50 per cent starting Wednesday.
The president said the move is in response to Ontario’s 25 per cent surcharge on electricity shipped to 1.5 million American homes and businesses across three states.
“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, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump posted Tuesday on Truth Social.
Trump’s promise marks the latest escalation in his on-again-off-again trade war against Canada, launched shortly after he took office in January and paused after intense market reaction to the turmoil injected into a long-cherished economic and military alliance between the two neighbours.
Trump also threatened to substantially raise tariffs on cars coming into the U.S. from Canada on April 2 if Canada doesn’t drop its retaliatory tariffs, and reiterated his insistence that Canada would benefit greatly from being annexed.
“The only thing that makes sense is for Canada to become our cherished Fifty-First State,” Trump’s post said. “This would make all Tariffs, and everything else, totally disappear.”
The U.S. stock market promptly fell following Trump’s social media post.
Prime minister-designate Mark Carney, who won the Liberal leadership race in a landslide on Sunday, said his government will maintain tariffs until Americans “show us some respect” and “can join us in making credible and reliable commitments to free and fair trade.”
Stock market jitters
Just last week, Trump paused 25 per cent tariffs on some Canadian goods for another month after getting pushback from American business leaders who say the trade war is bad for financial markets.
But his decision to press ahead with targeted tariffs on steel and aluminum poses a major concern for Canada, given the last time Trump imposed similar tariffs on those metals, there was a huge drop in Canadian exports, threatening jobs and businesses. According to Statistics Canada data, aluminum exports dropped by roughly half in 2019 as a result of Trump’s trade action in his first term.
CBC’s Lorenda Reddekopp breaks down how Doug Ford’s plan to impose a levy on electricity could affect the U.S.
After a brutal stock market sell-off on Monday sparked by his tariff threats, Trump now faces pressure to show he has a legitimate plan to grow the economy instead of possibly pushing it into a recession.
Trump has tried to assure the public that his tariffs would cause a bit of a “transition” to the economy, with the taxes prodding more companies to begin the years-long process of relocating factories to the United States to avoid the tariffs.
But he set off alarms in an interview broadcast on Sunday, in which he didn’t rule out a recession.
“I hate to predict things like that,” Trump told Fox News.
