BBC business reporter
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US President Donald Trump has announced plans to increase the tariffs he imposed on Canadian steel and aluminum imports, raising them to a total of 50%.
This escalation in the ongoing trade conflict comes in response to Ontario’s 25% tariffs on electricity exported to northern US states.
Trump warned that if the tariffs on agricultural products are not rescinded, he will significantly increase taxes on the automotive sector, a move that could “essentially, permanently shut down auto manufacturing in Canada.”
Ontario’s premier, Doug Ford, stated: “We will not back down until the threat of tariffs is eliminated for good.”
Ford further expressed on X that Trump has initiated a “baseless trade and tariff war with America’s closest ally.”
In a post on his own platform, Truth Social, Trump indicated that the tariffs would be implemented by Wednesday morning and that he would declare “a national emergency” regarding electricity in those states.
He additionally noted that Canada depends on the US for “military protection” and reiterated his desire for Canada to be the 51st state, saying it would eliminate tariffs and other barriers if that were to occur.
Mark Carney, the Prime Minister-designate of Canada, has previously stated that “Canada will never become part of America in any form.”
Fall in Stock Market
This announcement arrives at a time of considerable volatility in the markets.
On Tuesday, the S&P 500 index, which tracks the largest US companies, saw a decline of 0.5% following a 2.7% drop on Monday—its largest single-day decrease since December.
Similarly, the UK’s FTSE 100 index, after initially dipping, fell more than 1% following Trump’s recent remarks. The French Cac 40 index and the German Dax exhibited a similar trend.
Monday’s market dip started after Trump commented that the economy was undergoing a “transition” when questioned about a potential recession in the US.
Investor anxiety has grown over the potential economic impact of Trump’s trade policies, which are expected to contribute to rising inflation in the US and internationally.
