OTTAWA—U.S. President Donald Trump said he is moving immediately to jack up tariffs to 50 per cent on all Canadian steel and aluminum, to take effect Wednesday, in retaliation for Premier Doug Ford‘s move on a surcharge on electricity exports to American states.
In a pair of Truth Social posts Tuesday, Trump expressed fury at the move by Ontario to make electricity more expensive — a move that retaliated against the pending U.S. tariffs, and doubled his own penalty on Canadian metals.
And Trump ramped up his other threats against Canada, attacking the dairy and automotive sectors, and saying he’ll penalize Canada on defence spending.
The president had previously vowed to impose 25 per cent tariffs on Canada’s steel and aluminum. The latest threat means those Canadian metals will face a doubled tariff of 50 per cent.
The Canadian government had offered no immediate reaction, but Conservative Party Leader Pierre Poilievre called it “yet 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 United States.”
The war of words is rattling producers across Canada.
Algoma Steel CEO Michael Garcia, speaking to CBC, said a 50 per cent U.S. tariff would wipe out the ability to “continue a profitable business into the United States.” In the short term, he said, the company is examining its operations and ability to cover fixed costs. In the long term, ongoing threats are creating uncertainty for businesses.
Garcia said he’d have more confidence if there were “deliberate discussions” happening between the countries as opposed to the public battle unfolding. “Everything seems to be happening kind of in the public arena with, you know, a shot fired here, then a retaliatory shot. And it makes it very precarious for companies like ours to navigate through it.”
Steel industry representatives have argued it is an integrated industry in which both countries will be hurt by tariffs.
In his Tuesday post, Trump demanded Canada drop what he calls anti-American farmer tariffs on dairy products, which are legally in force under the Canada-U.S.-Mexico free trade deal.
And he said he will “substantially increase” the tariff — previously threatened at 25 per cent — on Canadian-made cars going into the U.S. which he said will “essentially, permanently shut down the automobile manufacturing business in Canada.”
Ford spoke to American media Tuesday and clapped back at Trump.
He told CNBC that Ontario will not only retain its electricity surcharge, but also has barred American companies from bidding on about $50 billion in infrastructure projects the province controls. “We’re going to make sure that we focus on Ontario and Canadian companies” because of Trump’s actions, he said.
“Protectionism does not work,” said Ford, noting that while Canada and the U.S. are “duking it out, China’s laughing.”
“This is just absolutely chaotic. As far as I’m concerned, one person is responsible. That’s President Trump,” he said. “Let’s sit down at the table and resolve the problem. That’s what we need to do.”
Appearing on CNN, Ford said it’s clear that Canada’s limits on American producers’ access to the relatively small dairy market here gets under Trump’s skin, but said it should be discussed at a negotiating table.
“That is as simple as that. Let’s renegotiate the USMCA,” said Ford, using the American term for the Canada-U.S.-Mexico free trade agreement that Trump signed in 2018 during his first term.
“Let’s stop the bleeding on both sides of the border, as China is sitting there laughing at both countries. Let’s sit down and negotiate a fair trade for both countries and everyone benefits.”
Canada’s premiers and prime minister-designate Mark Carney all need to be singing from the same hymn sheet, said Matthew Holmes, director of public policy for the Canadian Chamber of Commerce.
“We have to make sure that everybody’s co-ordinated, and that’s not my sense right now,” said Holmes. “I want to make sure we’re not just responding emotionally to things that we don’t like.”
Trying to avoid being in Trump’s crosshairs is a safer strategy, at least in the short term, Holmes argued.
“Anything that has his attention right now is not good, and Canada definitely has his attention,” said Holmes. “It would benefit us to stand in the tall grass for a day or two.”
The increased tariff on steel would be devastating for Hamilton’s economy, Holmes said.
“A 50 per cent tariff is pretty tough on that city. Maybe they don’t come back from that,” he said.
Trump again repeated Tuesday his erroneous claim that the U.S. is “subsidizing” Canada by $200 billion a year — a claim he has made by calling that the trade deficit with Canada, when in fact U.S. data shows that the trade deficit is around $63 billion, and 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.
Trump’s social media post again complained that “This cannot continue,” and threatened to make Canada a 51st state, an annexation threat the Canadian government once dismissed as a joke, but now says must be taken seriously.
On Tuesday, 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.
There was no immediate reaction from Prime Minister Justin Trudeau or Carney.
With files from Josh Rubin and Robert Benzie
