Trump holds off on 50% Canadian steel, aluminum tariffs after day of threats and reversals

On Tuesday, Trump had ordered 50% tariffs in response to Ontario placing a tariff on electricity going to the United States. Later in the day, Ontario Premier Doug Ford agreed to pause the surcharge after speaking with US Secretary of Commerce Howard Lutnick.

In a joint statement issued on social media shortly before 3 p.m. Tuesday, Ford and Lutnick wrote:

Secretary Lutnick agreed to officially meet with Premier Ford in Washington on Thursday, March 13 alongside the United States Trade Representative to discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline. In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota.

“Pursuant to his previous executive orders, a 25% tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th,” White House spokesperson Kush Desai said in a statement, as quoted by Bloomberg News.

Here’s what happened earlier

Trump wanted to double the penalty on the metals, raising them to 50%, effective March 12, he said in a post on TruthSocial Tuesday morning:

“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. This will go into effect TOMORROW MORNING, March 12.”

Section 232 tariffs are scheduled to go into effect on March 12. Those are separate from the 25% tariffs on all goods from Canada and Mexico that Trump ordered last week and delayed for 30 days again.

The increase to 50% was in response to the Ontario government applying a 25% surcharge on all electricity exports to the US as part of the province’s initial retaliatory measures to US tariffs on Canada.

The surcharge would have affected 1.5 million homes and businesses in Michigan, Minnesota, and New York, costing up to $400,000 every day the surcharge remained in place, according to the Ontario government.

“President Trump’s tariffs are a disaster for the US economy. They’re making life more expensive for American families and businesses,” Premier Doug Ford said in a statement Monday. “Until the threat of tariffs is gone for good, Ontario won’t back down. We’ll stand strong, use every tool in our toolkit and do whatever it takes to protect Ontario.”

Autos in the crosshairs

Trump had also said he would declare a national emergency on electricity in those states affected by the surcharge.

“If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!” the president said.

Last week, vehicles were eventually given a 30-day pause under the 25% blanket tariffs if they complied with the current North American trade agreement USMCA.

In February, Ford CEO Jim Farley told the Wolfe Research Auto, Auto Tech and Semiconductor Conference in New York:

“Let’s be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the US industry that we’ve never seen. Frankly, it gives free rein to South Korean, Japanese, and European companies that are bringing 1.5 million to 2 million vehicles into the US that wouldn’t be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever.”

Later, in his social media post, Trump threatened to annex Canada.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” he wrote on TruthSocial.

“This would make all Tariffs, and everything else, totally disappear. Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the World will be bigger, better, and stronger than ever — And Canada will be a big part of that,” Trump added.