President Trump on Tuesday said he will increase tariffs on Canadian steel and aluminum from 25% to 50% in response to Ontario’s decision to impose a surcharge on electricity it sends to U.S. communities.
Mr. Trump said the higher levy will take effect Wednesday and he planned to declare a national emergency in the parts of the U.S. affected by Ontario’s 25% surcharge on energy.
“This will allow the U.S. to quickly do what has to be done to alleviate this abusive threat from Canada,” Mr. Trump wrote on Truth Social.
The president said if Canada refuses to drop levies on farm goods and other U.S. products, he will impose tariffs on cars from Canada on April 2, “which will, essentially, permanently shut down the automobile manufacturing business in Canada.”
“Those cars can easily be made in the USA!” he said.
Ontario Premier Doug Ford announced the electricity surcharge on Monday, saying he had no choice but to act in the face of Mr. Trump’s trade threats.
SEE ALSO: Trump tariffs crack down on China’s trade tricks
Mr. Trump countered by saying Canada would have less to worry about if it became the 51st state.
“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!” he wrote on Truth Social.
Mr. Trump is ratcheting up his trade spat with Canada even as Wall Street frets over the whipsaw news out of Washington.
The president agreed to pause broad tariffs on Canada and Mexico until April, but investors are looking for certainty. They were also spooked by Mr. Trump’s refusal to rule out a recession in the U.S.
The stock market continued to crater Tuesday, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite down following Monday’s crash.
Citigroup recently downgraded U.S. stocks, saying “U.S. exceptionalism is at least pausing.”
The White House says the U.S. is in a period of limbo as Mr. Trump works to shake off the Biden era and implement tax cuts and deregulation.
“Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs,” White House spokesman Kush Desai said. “President Trump delivered historic job, wage and investment growth in his first term and is set to do so again in his second term.”
Mr. Trump imposed a 25% tariff on imported steel and aluminum earlier this year. He is increasing that amount by 25% for Canada, resulting in a 50% increase.
The tariffs are designed to protect U.S. metal workers from the flood of cheap steel, notably from China, that tends to undercut domestic producers.
Critics, including the Competitive Enterprise Institute, argue that while the tariffs might create some jobs in metals industries, they could lead to higher prices and reduced competition across various sectors that rely on these materials, such as automotive and housing.
They suggest the economic impact might be counterproductive, noting that there are more manicurists employed in the U.S. than workers in the steel and aluminum industries combined.
