In an unexpected turn of events, U.S. President Trump has decided not to double the tariffs on Canadian steel and aluminum imports as he had previously threatened. The announcement came from Commerce Secretary Howard Lutnick during an interview with CBS News. This decision came on the heels of a joint statement from Lutnick and Ontario Premier Doug Ford, revealing that Canada would suspend its new 25% surcharge on electricity exports.
The news of this suspension was made public mere hours after President Trump declared on Truth Social, his preferred social media platform, his intent to hike tariffs on Canadian steel and aluminum imports from the previous rate of 25% to a whopping 50%. However, Lutnick, when probed by CBS News on whether the president was planning to follow through on his threat of imposing 50% tariffs, responded, “No, that’s off, too. So, we’re at 25% for steel and aluminum because that’s where we were.”
The tumultuous ride of tariff rates began in the wake of Mr. Trump’s decision to impose 25% tariffs on steel and aluminum imports from Canada. This move sparked a heated debate and contributed to a tense atmosphere surrounding the economic relationship between the neighboring countries.
On the day of the announcement, a post from Premier Ford’s account shed light on the discussions held between him and Secretary Lutnick. “Today, United States Secretary of Commerce @howardlutnick and Premier of Ontario Doug Ford had a productive conversation about the economic relationship between the United States and Canada,” the post read. It also highlighted that Secretary Lutnick had agreed to meet with Premier Ford on Thursday, March 13, in Washington, alongside the United States Trade Representative. The main agenda of this meeting was to discuss the renewed USMCA ahead of the April 2 reciprocal tariff deadline.
In response to this, Ontario agreed to suspend its 25% surcharge on electricity exports to Michigan, New York, and Minnesota. This concession was seen as a strategic move to lessen the tariff burden and maintain the delicate balance of trade between the two countries.
However, the rollercoaster of tariff negotiations was far from over. Moments after the joint statement by Ford and Lutnick was made public, President Trump told reporters that he was contemplating retracting the 50% tariffs on Canadian steel and aluminum imports that he had announced earlier. He stated that he was “looking at it” and could “make a different decision.”
The President had earlier justified his intention to double the levy on all steel and aluminum imports from Canada, starting from Wednesday, citing Ontario’s electricity surcharge as the primary reason for the price hike. He had expressed his sentiments through a post on Truth Social on Tuesday morning, stating, “Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.”
The President also made a call for Canada to lower tariffs on various U.S. dairy products. He further stated that he would be declaring a “national emergency on electricity” in areas affected by Canada’s electricity surcharge, specifically pointing out New York, Minnesota and Michigan, which share borders with Canada, as the targets of Ontario’s surcharge.
In a more surprising twist, President Trump reiterated his desire for Canada to become the 51st state of the United States, a proposal often met with opposition from Canadians. He suggested that such a move would eliminate tariff pressures and offer additional benefits. “The only thing that makes sense is for Canada to become our cherished Fifty First State,” Mr. Trump wrote. He argued that such a merger would lead to substantial reductions in Canadian taxes, improve military security, eliminate the Northern Border problem, and contribute to the growth and strength of the U.S. – making it “bigger, better and stronger than ever.”
The fluctuating tariff rates and their potential implications caused a stir in the stock market, with stocks tumbling again on Tuesday. Investors were left grappling with uncertainty over the President’s tariff regime and fears that the U.S. economy could potentially slip into a recession due to these unpredictable trade policies.
Despite the turbulent situation, the conversations between the U.S. and Canada are ongoing, with both sides working towards striking a balance that would benefit their respective economies. However, the impact of these tariff wars on the future economic relations between the two nations remains to be seen.
