US President Donald Trump has announced he will double planned tariffs on Canadian steel and aluminium imports to 50 percent, escalating a trade war with the United States’s northern neighbour.
In a social media post on Tuesday morning, Trump said the increased tariffs come in response to a decision by the province of Ontario to put a 25-percent surcharge on electricity exports to some US states.
He said the increased tariffs on steel and aluminium would come into effect on Wednesday.
“The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear,” Trump wrote on Truth Social.
US-Canada relations have plummeted amid Trump’s push to impose steep tariffs on a range of Canadian goods and his repeated threats to annex the country.
The US president has said the tariffs – some of which came into effect last week – are part of an effort to balance the countries’ trade relationship. However, the Canadian government has rejected the measures as “unjustified” and unveiled retaliatory levies.
On Monday, Ontario Premier Doug Ford announced that his government would impose a 25-percent surcharge on electricity exports to the US states of Michigan, Minnesota and New York.
Ford – who has taken a strong line against Trump’s economic policies – told reporters that Ontario electricity powers 1.5 million American homes and businesses in those US states.
The surcharge, the premier said, would cost families and businesses as much as $276,000 (400,000 Canadian dollars) per day.
“Let me be clear, I will not hesitate to increase this charge. If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely,” Ford said.
The US stock market plunged this week amid the uncertainty around Trump’s economic and trade policies.
Canada and the US are major trading partners, with the US importing $412.7bn from its northern neighbour in 2024, according to the Office of the US Trade Representative. American exports to Canada that same year totalled $349.4bn.
Canada tops the list of foreign suppliers of both steel and aluminium to the US, with imports of $19.5bn last year, according to data from S&P Global.
“While steel represents a significant portion of total US imports, the country depends far more on Canadian aluminum to meet domestic demand,” the Canadian Chamber of Commerce said in a recent factsheet.
It said US tariffs on steel and aluminium could lead to job losses in Canada, while retaliatory measures by the Canadian government could raise prices for consumers.
Despite concerns that a prolonged trade war with Canada could raise prices for Americans and hurt the US economy, the Trump administration has defended its tariff policy as necessary to close a trade deficit between the two countries.
In his Truth Social post on Tuesday, Trump warned Canada that if it did not drop its tariffs on US goods, his administration would increase planned reciprocal levies set to take effect in early April.
That “will, essentially, permanently shut down the automobile manufacturing business in Canada”, Trump said.
“Those cars can easily be made in the USA! Also, Canada pays very little for National Security, relying on the United States for military protection. We are subsidizing Canada to the tune of more than 200 Billion Dollars a year. WHY??? This cannot continue.”
Larry Summers, a veteran economist and former US treasury secretary, slammed the increased tariffs as Trump’s “worst trade policy yet”.
“Increasing the price of key inputs for the US manufacturing industries–who employ 10 million people–is what a US adversary would do,” Summers wrote on X. “It is a self-inflicted wound to the US economy that we cannot afford, at a moment when recession risks are rising.”
The Canadian government did not immediately comment on Trump’s announcement.
Prime Minister Justin Trudeau is expected to formally step down in the coming days to allow the new leader of his governing Liberal Party, Mark Carney, to step in as the country’s next prime minister.
Carney has promised to take on Trump and deepen Canada’s relationships with other trading partners.
“We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves,” he said during his Liberal leadership victory speech on Sunday.
“So the Americans, they should make no mistake – in trade, as in hockey, Canada will win.”
