Trump threatens double tariffs on Canadian metals, then backs off

President Donald Trump announced on social media yesterday that he would double tariffs on Canadian steel and aluminum to 50% (a 25% duty is scheduled to kick in today for all imports into the US). The move came after Ontario imposed a 25% surcharge on electricity it supplies to the US.

However, hours later, Trump reversed course after Canadian officials withdrew from the planned levies.

Ontario Premier Doug Ford, on Monday, threatened to impose higher electricity export fees that would have raised prices for over 1 million US homes in New York, Michigan, and Minnesota. After agreeing to suspend the surcharge, the White House confirmed that only the originally planned 25% tariffs would take effect on Wednesday.

Yesterday, Trump also threatened levies on Canadian auto exports.

On March 4, Trump’s 25% blanket tariffs on imports from Mexico and Canada went into effect. But two days later, the president confirmed that the US would pause tariffs on goods and services compliant with the United States-Mexico-Canada Agreement (USMCA) until April 2.

Markets reacted negatively to the uncertainty. The S&P 500 dropped 0.7% on Tuesday, following a 2.7% drop on Monday—its worst decline since December. The UK’s FTSE 100, France’s Cac 40 and Germany’s Dax also fell.

Meanwhile, US business leaders warned that unpredictable trade policies could slow economic growth.