WASHINGTON — President Donald Trump escalated his trade war with Canada on Tuesday, pledging to double his planned steel and aluminum tariffs on America’s northern neighbor after the province of Ontario said it would charge U.S. customers more for electricity.
Trump said he would increase from 25% to 50% the tariffs due to take effect Wednesday for Canada only, using his authority to declare a national emergency on electricity in the affected areas.
Trump’s action came one day after Ontario said it would put a 25% fee on U.S. energy users in Minnesota, New York and Michigan. Ontario Premier Doug Ford said he expected the surcharge to raise costs for those American consumers by an average of $100 a month. Ford added that “if the United States escalates, I will not hesitate to shut the electricity off completely.”
Trump, in a post on Truth Social, questioned why the US. allows another country to provide electricity, even for a small area.
“Who made these decisions, and why?” Trump wrote. “And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!”
Ford said Tuesday that Trump launched an “unprovoked attack” on Canada when he increased the steel and aluminum tariffs.
“We will not back down. We will be relentless. I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs. And it’s unacceptable,” Ford said on MSNBC.
Ford said CEOs should try to change Trump’s mind.
“You see the market tumbling. Consumer confidence is down. And if he continues on with this, assembly plants in Michigan will shut down and around the country, whoever makes autos, and as well as businesses, they’re going to hurt,” he said.
Tariffs are likely to disrupt supply chains and increase the cost of transportation which will lead to a rise in price for almost everything, Truist head of U.S. economics Mike Skordeles previously told USA TODAY.
“Broadly speaking, higher tariffs will increase import costs, forcing companies to choose between absorbing the hit to their margins or passing it on to consumers,” Madhav Durbha, a supply chain expert and group vice president of consumer-packaged goods and manufacturing at RELEX, said in an email to USA TODAY. “Either way, this creates inflationary pressure and dampens consumer spending, impacting not only individual companies but the broader market.”
As previously reported, the U.S. auto industry and a broad array of common imports from Canada to the U.S., according to the Bureau of Industry and Security and Trading Economics, could be affected by the tariffs. For consumers, that could mean higher prices for appliances, cereal, milk products, alcoholic beverages, and more.
Trump on Tuesday once again expressed his desire to see the U.S. absorbing its northern neighbor. In recent months, Trump has repeatedly suggested he wants to annex Canada and has referred to its outgoing prime minister as “Governor Justin Trudeau of the Great State of Canada” − much to the chagrin of Trudeau and many Canadians.
“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,” Trump wrote on Truth Social.
Trump overtures were panned by Canada’s Prime Minister-designate Mark Carney on Sunday in his first speech after winning the leadership of the governing Labor Party.
Canada “never, ever, will be part of America in any way, shape, or form,” said Carney, adding that people “are worried about Canada’s future, in the face of President Trump’s threats and a more divided and dangerous world.”
Unfazed, Trump wrote Tuesday on his social media post that by Canada joining the U.S., the “greatest and most powerful nation in the World will be bigger, better and stronger than ever — And Canada will be a big part of that.”
“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,” he wrote.
Trump’s tariff tit-for-tats have rattled markets. The Dow Jones Industrial Average was down almost 600 points at noon Tuesday. A day prior the Dow plunged by nearly 900 points. The sell-off has accelerated as U.S. officials battled recession fears. Trump would not rule out an economic slowdown in an interview that aired over the weekend.
“I hate to predict things like that. There is a period of transition because what we’re doing is very big,” Trump said in an interview that aired on “Sunday Morning Futures With Maria Bartiromo.”
Trump previously announced tariffs on Canada and Mexico, some of which he has since delayed. He said last week that products that fall under the USMCA trade agreement would not face a tariff until April. Trump also delayed tariffs on automakers until April 2, effectively halting much of his trade agenda for at least a month. Trump plans to unveil reciprocal tariffs on nations that charge the U.S. fees on the same date.
President Donald Trump promised during the 2024 campaign to turbocharge the economy, declaring he’d work a “miracle” that would bring about “extraordinary” boom times. Rallying in Grand Rapids, Mich., the day before the election, Trump predicted his promised victory would swiftly improve the job market and fatten wallets.
“We’re just one day… a half a day… away from the best jobs, the biggest paychecks, and the brightest economic future the world has ever seen,” the former and future Republican president declared as the crowd held up signs reading “Dream big. Again!” and “Trump will fix it.”
Now – nearly two months into a second Trump term – his administration is bracing Americans for economic turbulence as last year’scampaign rhetoric collides with the reality of an increasingly uncertain economy. Read more here.
− Zac Anderson
Against the backdrop of recession concerns, Americans are yet again bracing for a possible government shutdown. Congress has until 11:59 p.m. on Friday to pass legislation to keep the government funded. Otherwise, a majority of federal employees will go without pay or be forced to stop working while most government services pause.
House Republicans unveiled a spending bill, supported by Trump, that keeps the government running until Sept. 30. The vote on the bill, known as a continuing resolution, is expected later Tuesday. But it’s unclear whether the bill has enough support to pass the House. Some Democrats have already spoken out against it.
− Sudiksha Kochi