OTTAWA — After a frenetic day of on-again, off-again escalating tariff threats by U.S. President Donald Trump, there were signs of a possible breakthrough, but little sense the chaos threatening the Canada-U.S. relationship is letting up.
Premier Doug Ford scored a high-stakes meeting for himself and federal Finance Minister Dominic LeBlanc with top Trump trade officials, and the stock markets underscored that companies and investors hate the uncertainty of the roiling economy.
The good news — if there is such a thing — is that Canadian steel and aluminum will not face a 50 per cent American tariff as Trump threatened first thing Tuesday, in venting his fury against Ford’s export charge on Ontario electricity sold to New York, Michigan and Minnesota.
The bad news — in case anyone doubted the president — is that Canadian steel and aluminum will still face the 25 per cent tariff that Trump ordered to take effect on his first day in office, the same tariff that is to be in force against all global steel and aluminum on Wednesday. And Trump has not paused other sectoral and broad commercial tariff threats that remain.
On Tuesday afternoon, Trump dangled the possibility of reversing his latest 50 per cent tariff threat against Canadian steel and aluminum, which he had earlier posted on Truth Social. “I’ll let you know about it,” Trump said offhandedly before repeating his 51st state threats.
Later the White House clarified that the scheduled 25 per cent import charge would proceed.
White House spokesman Kush Desai claimed victory on Trump’s behalf, according to a White House pool report, saying Ford had “backed down” on Ontario electricity export charges. He said pursuant to previous executive orders, a 25 per cent tariff on steel and aluminum “with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th.”
The tensions between Canada and the U.S. played out in real time Tuesday, as markets bounced around, and White House spokesperson Karoline Leavitt said the two countries are now more like rivals than close allies.
“I think Canada is a neighbour. They are a partner. They have always been an ally. Perhaps they are becoming a competitor now,” she told reporters.
LeBlanc said in a statement: “The Government of Canada has been clear on this issue since the beginning — should the United States move forward tomorrow (Wednesday) with the imposition of tariffs on Canadian products, including steel and aluminum, we will be ready to respond firmly and proportionately. We will never relent in standing up for Canadian jobs, industries, and workers.”
Ford first posted word of a truce in a bitter trade war after Commerce Secretary Howard Lutnick called him.
The Ontario premier said they agreed to meet Thursday, along with LeBlanc and U.S. Trade Representative Jamieson Greer, in Washington to discuss the ongoing trade war and the need for a “renewed” trade deal between the two countries. In return, Ford said, he would suspend the electricity surcharge.
“It’s called an olive branch,” Ford said. “When you’re negotiating with someone, they call you and they hand over an olive branch. The worst thing I think I could do as premier of Ontario is ignore them and hang up the phone on them. I don’t operate that way.”
The Canada-U.S. trade dispute had ramped up Monday when Ford followed through on his threat to impose retaliatory 25 per cent export tariffs on electricity going to Minnesota, Michigan and New York — a move that drew Trump’s attention and fury.
Ford told American media outlets that he was prepared if necessary to cut off power, comments that the White House spokesperson called “egregious.”
Ford later denied he caved to the U.S. president.
“We don’t roll over to anyone,” Ford told reporters, but he said it was about letting “cooler heads prevail” and allowing space for discussions.
Trump didn’t name him but said the premier was “a very strong man” and a “gentleman” whose concession he appreciated.
Ford publicly took the lead as a federal leadership transition occurred in Ottawa, with Mark Carney not yet sworn in as prime minister, and Justin Trudeau’s front-line ministers still in place but saying little in public.
Ford plans to sit down with Carney at a private breakfast meeting Wednesday in Toronto, saying Ottawa and Queen’s Park are working in lockstep.
“We’re going to be talking about the USMCA moving forward,” he said, using the American term for the North American free trade deal.
“It’s absolute chaos out there right now, we need to move forward jointly.”
Ford said he wanted to discuss a “renewed” Canada-U.S.-Mexico deal before the April 2 deadline Trump has laid out for bigger “reciprocal” commercial tariffs on all of America’s trading partners.
In a pair of Truth Social posts Tuesday, Trump had doubled his 25 per cent penalty on Canadian aluminum and steel, threatening those metals would face a doubled tariff of 50 per cent, before escalating his other threats against Canada, attacking the dairy and automotive sectors, and saying he’ll penalize Canada on defence spending.
Carney did not go before reporters but issued a written statement. “My government will ensure our response has maximum impact in the U.S. and minimal impact here in Canada, while supporting the workers impacted. My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
That’s a repeat of what Carney said in his Liberal leadership victory speech Sunday night. Although he campaigned on imposing dollar-for-dollar tariffs, the former central banker appears to have slightly shifted toward a more targeted response.
A full dollar-for-dollar response to Trump’s threatened tariffs — which in the case of cars and now metals — would have Canada impose much higher countermeasures than what the Trudeau government has levied. The first phase has seen Ottawa impose counter-tariffs on $30-billion worth of American goods, while a second phase of retaliatory tariffs on the next $125-billion worth of American imports is on hold, after Trump had paused his first round of tariffs.
Conservative Leader Pierre Poilievre had called Trump’s escalated threat “another betrayal by the president of the long friendship between Canada and the United States,” and called on Ottawa to immediately bring in matching retaliatory 50 per cent tariffs on all steel and aluminum imported from the U.S.
The war of words is rattling steel and aluminum producers, car makers, and many other industry and union leaders across Canada.
Trump repeated Tuesday his erroneous claim that the U.S. is “subsidizing” Canada by $200 billion a year — a claim he has repeatedly made in the past in referring to the trade deficit with Canada, when in fact U.S. data shows that the trade deficit is around $63 billion. Once energy exports are removed from the equation, the U.S. actually has a goods trading surplus with Canada.
In other words, in the big picture, without counting oil and gas, Americans actually sell more to Canada than Canada sells to the U.S.
But Trump said Canada treats the U.S. “very unfairly.”
Trump repeated on Tuesday that Canada should become the 51st U.S. state, an annexation threat the Canadian government once dismissed as a joke, but now says must be taken seriously.
Trump said it only makes “sense” for Canada to become another American state to make tariffs disappear, to reduce taxes, secure its military defence and the border, at the same time he said he could make the border disappear.
“The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful Nation anywhere in the World — And your brilliant anthem, “O Canada,” will continue to play, but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!,” Trump wrote.
