In a significant development on Tuesday, the leader of Ontario, Canada’s most populous province, announced the suspension of a recently implemented 25% surcharge on electricity exports to the United States. This decision came after discussions with U.S. Commerce Secretary Howard Lutnick, with an upcoming meeting in Washington planned for Thursday to discuss the United States-Mexico-Canada Agreement.
Ontario Premier Doug Ford emphasized the importance of engaging in dialogue, stating that it would have been unwise to ignore the U.S. after they extended a gesture of reconciliation. Consequently, in a reciprocal move, White House trade adviser Peter Navarro mentioned that President Donald Trump decided against elevating tariffs on Canadian steel and aluminum. However, the U.S. government still intends to implement a 25% tariff on all steel and aluminum imports starting Wednesday.
President Trump expressed his appreciation for Ontario’s decision to halt the electricity surcharge and noted the positive nature of this development. He had previously contemplated increasing tariffs as a countermeasure to Ontario’s pricing strategy for electricity exports to the U.S., pointing out that the use of electricity as leverage was unacceptable.
Despite tensions, Trump reiterated his contentious view that Canada should become the 51st state, dismissing the border as an artificial construct. As of Tuesday, Trump had escalated tariff threats, seeking to increase them from 25% to 50% for Canada, further straining trade relations.
Premier Ford criticized this economic confrontation initiated by the Trump administration, labeling it as an unwarranted move that could potentially lead to recession risks fueled by a single decision-maker. Prior to Ford’s announcement, Ontario had increased electricity prices for 1.5 million American consumers in retaliation against the U.S. trade policies.
Mark Carney, who is set to become the new Canadian Prime Minister, affirmed the continuance of the federal government’s initial set of tariffs until the U.S. demonstrates respect and advocates for fair trade practices. Though Carney opts not to accompany Ford to Washington, he maintains steadfast in Canada’s tariff stance, vowing to protect Canadian interests against steel and aluminum tariff threats from the U.S.
Canada had previously enacted $30 billion Canadian worth of retaliatory tariffs on various American products, with preparations for further measures should the U.S. proceed with steel and aluminum tariffs. Premier Ford urged for negotiated solutions with the U.S., stressing the importance of managing the situation through diplomatic engagement.
