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The province of Ontario in Canada lifted a surcharge on exports of power to the US shortly after President Donald Trump attributed it to his decision to increase tariffs on steel and aluminium imports from Canada to 50 per cent.
Ontario Premier Doug Ford announced on Tuesday afternoon that he would suspend the 25 per cent surcharge after a productive discussion with US Commerce Secretary Howard Lutnick.
Ford revealed plans to meet with Lutnick and US Trade Representative Jamieson Greer in Washington later in the week to address the trade tensions.
The reversal by the premier, just one day after implementing the surcharge, came following Trump’s announcement that the US would impose 50 per cent tariffs on Canadian steel and aluminium the next day.
Trump stated on his Truth Social platform on Tuesday morning, “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.”
The recent trade dispute led to increased volatility on Wall Street, causing a temporary dip in the S&P 500 index on Tuesday, following a significant sell-off the previous day. The index later turned positive, trading up 0.1 per cent in late-afternoon trading.
Trump’s decision to double tariffs on Canadian metal imports is part of a series of back-and-forth actions between the US and Canada, as the president’s aggressive tariff policies and economic nationalism threaten to disrupt North American trade.
Shortly after taking office, Trump announced 25 per cent tariffs on Canada and Mexico, but last week he granted a one-month extension for goods compliant with a 2020 free trade agreement.
The upcoming aluminium and steel tariffs are among a separate set of duties affecting producers globally, set to take effect on Wednesday.
White House officials stated that the 25 per cent global tariffs on metal imports aim to safeguard the US domestic industry.
Canada’s incoming Prime Minister, Mark Carney, condemned Trump’s latest move as “an attack on Canadian workers, families, and businesses.”
Carney pledged that his government would respond in a way that maximizes impact in the US while minimizing the effects in Canada.
The White House dismissed concerns about market instability on Tuesday.
Press Secretary Karoline Leavitt remarked, “When it comes to the stock market, the numbers that we see today, the numbers we saw yesterday…are a snapshot of a moment of time. We are in a period of economic transition.”
A key indicator of the discrepancy between US and London aluminium prices, known as the Midwest premium, surged on Tuesday, indicating rising costs for American industrial entities.
Futures tracking the premium, which monitors prices of metal delivered to Midwest plants, spiked up to 18 per cent, according to FactSet data.
Trump threatened to significantly raise levies on cars imported to the US if Canada does not eliminate its longstanding tariffs, a move he claimed would effectively shut down the country’s automotive sector.
He also suggested that Canada could no longer rely on US military protection and proposed that “the only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear.”
Canada has vehemently opposed such ideas proposed by Trump since he assumed office in January.
Additional reporting by Steff Chávez in Washington