On Tuesday, President Donald Trump announced that he would be increasing the tariffs on steel and aluminum imports from Canada, raising them from 25% to 50%. This action marks a significant escalation in the ongoing economic discord between the United States and its largest trading partner.
Trump made the announcement via his Truth Social platform, stating that the new tariff rates would take effect starting Wednesday, following Ontario’s decision to impose a 25% tariff on electricity exported to the U.S.
He further declared that he would be designating a “national emergency” for the three states affected by Ontario’s tariffs to facilitate the implementation of the increased duties.
Roberto Schmidt / AFP – Getty Images
In addition, Trump urged Canada to eliminate its tariffs on U.S. dairy products and threatened to “significantly increase” tariffs on imported vehicles if Canada did not withdraw “other unjustifiable, long-standing tariffs.”
He cautioned that the vehicle tariffs could “essentially, permanently shut down the automobile manufacturing industry in Canada,” although he did not provide any supporting evidence.
Trump reiterated some of his recent statements about incorporating Canada as part of the U.S., though he allowed that Canada could retain its national anthem.
“The only sensible solution is for Canada to become our beloved Fifty-First State,” Trump wrote. “This would eliminate all tariffs and related issues.”
CNBC reported that Trump has not yet filed the formal paperwork to officially raise tariffs to 50%, according to a senior official in his administration, who noted that the move remains “in progress” and is more of a threat until the documents are finalized.
On Monday, Ontario Premier Doug Ford announced a 25% surcharge on electricity for approximately 1.5 million residents in Michigan, Minnesota, and New York in retaliation to Trump’s recent aggressive remarks towards Canada.
As the news broke, stock markets briefly dipped, with the S&P 500 dropping by as much as 0.4% and the Dow Jones Industrial Average falling over 400 points, or more than 1%.
Amid his second presidential term, Trump has increasingly targeted Canada, putting strain on relations with a key ally. Earlier in the month, he briefly instituted, then rescinded, tariffs on various Canadian goods while blaming Canadian leaders for inaction on fentanyl trafficking, for which comparatively little is intercepted at the northern border versus the U.S.-Mexico border.
In a separate Truth Social post on Monday evening, Trump labeled Canada a long-standing “tariff abuser.”
“The United States will no longer be subsidizing Canada,” he warned, adding, “We don’t need your Cars, we don’t need your Lumber, we don’t need your Energy, and soon, you will realize that.”
While Mexico has faced similar threats, President Claudia Sheinbaum has managed to soothe tensions with Trump.
In contrast, Canadian officials have responded more forcefully with retaliatory tariffs and public statements.
“I’m not sure why he keeps attacking his closest friends and allies, but we need the American public to step in,” Ford stated Tuesday during a CNBC appearance. “We need those CEOs to stand up and tell him this will lead to disaster. It’s total chaos right now.”
The New York Independent System Operator, which oversees the state’s electricity grid, has confirmed sufficient generating capacity to phase out reliance on Canadian powers.
A representative from Michigan’s Public Service Commission relayed to The Associated Press on Monday that the effect on residents is likely to be “minimal.” Minnesota’s Governor Tim Walz—who is Kamala Harris’s running mate for 2024—expressed similar expectations for his state.
