Ontario Premier Doug Ford has announced the suspension of a 25% surcharge on electricity exports to the United States following discussions with U.S. Commerce Secretary Howard Lutnick.
The decision comes in response to President Donald Trump’s threats to escalate steel and aluminum tariffs on Canada from 25% to 50%, a move that had rattled markets and strained relations with America’s northern neighbor.
In a joint statement with Lutnick, shared on X, Ford revealed plans for a March 13 meeting with the U.S. Trade Representative to negotiate the renewal of the U.S.-Mexico-Canada Agreement (USMCA) before Trump’s self-imposed April 2 deadline for “reciprocal tariffs.”
Ford emphasized that Ontario’s suspension of the electricity surcharge, affecting exports to Michigan, New York, and Minnesota, was a gesture of goodwill to de-escalate tensions.
Speaking at the White House on Tuesday, Trump hinted at a possible reduction in tariffs on Canadian goods. When reporters pressed him on whether he would lower the levies, he responded, “Probably so,” though he remained noncommittal about the threatened 50% increase, adding, “I’ll let you know.”
The remarks followed a volatile day on Wall Street, where major stock indexes rebounded from early losses into positive territory after Ford’s announcement.
The tariff saga began earlier Tuesday when Trump posted on Truth Social, warning that steel and aluminum duties would jump to 50% by Wednesday unless Ontario reversed its electricity surcharge.
Trump also threatened to declare a “national emergency” in the affected states to expedite the tariffs and urged Canada to eliminate duties on U.S. dairy products, warning of steep auto tariffs that could “permanently shut down” Canada’s car manufacturing sector if broader trade barriers persisted.
In a provocative aside, Trump revived his recent rhetoric about Canada joining the U.S. as the “Fifty-First State,” suggesting it would eliminate all trade disputes while allowing Canada to retain its national anthem.
The comments underscore a growing friction in Trump’s second term, with Canada facing repeated tariff threats despite its status as a key ally.
This month, Trump had briefly imposed, then withdrawn, tariffs on various Canadian goods, citing alleged inaction on fentanyl trafficking—a claim undermined by data showing minimal seizures at the U.S.-Canada border compared to the southern frontier with Mexico.
While Mexico has navigated similar threats with diplomatic finesse under President Claudia Sheinbaum, Canada’s more confrontational stance—marked by retaliatory tariffs and sharp public rebukes—has yet to yield the same success.
Ford, appearing on CNBC Tuesday, criticized Trump’s aggression toward allies and called on American CEOs to oppose the tariffs, warning of “mass chaos.”
Meanwhile, newly appointed Canadian Prime Minister Mark Carney denounced Trump’s threats as “an attack on Canadian workers, families, and businesses,” vowing to maintain Canada’s tariffs until the U.S. commits to “free and fair trade.”
The tariff standoff has significant economic stakes. Morgan Stanley analysts cautioned that U.S. reliance on Canadian steel and aluminum imports could drive up domestic prices, potentially offsetting gains for American producers like Alcoa, which has substantial operations in Canada.
Despite this, some investors bet on short-term gains, boosting Alcoa’s stock by over 2% on March 11.
CNBC reported that Trump has yet to sign formal documents enacting the 50% tariffs. A senior official described the policy as “in the works” but still a “threat” rather than a finalized action.
As talks loom, the U.S.-Canada trade relationship hangs in the balance. Both sides signal a willingness to negotiate, albeit under the shadow of Trump’s unpredictable tariff playbook.