US president Donald Trump has announced 50% tariffs on Canadian steel and aluminum effective tomorrow.
Ontario Premier Doug Ford announced the 25% surcharge on electricity flowing into US states in response to Trump’s initial tariff announcement.
The president wrote on his social media platform Truth Social: “Based on Ontario, Canada, placing a 25% Tariff on “Electricity” coming into the United States, I have instructed my Secretary of Commerce to ad [sic] 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 12th.”
“Also, Canada must immediately drop their Anti-American Farmer Tariff of 250% to 390% on various US dairy products, which has long been considered outrageous.”
Trump added that he will soon declare “a National Emergency on Electricity within the threatened area,” to allow the US to quickly act and “alleviate this abusive threat from Canada.”
Stocks moved lower on the news, with the Dow dropping over 1%.
'Tit-for-tat' policy
"(N)ews that President Trump has slapped a further 25% tariff on steel and aluminum imports from Canada has sapped market confidence," XTB research director Kathleen Brooks said.
"Tariffs on these imports are now at 50% and are seemingly in retaliation for Ontario’s decision to impose a 25% tariff on electricity exports to the US.”
Brooks described Trump’s “tit-for-tat tariff policy” as a disaster for stock markets.
“Trump’s erratic and reactionary trade policy is eroding faith in US exceptionalism and fueling recession fears,” Brooks said.
“There is now a 25% chance of a US recession this quarter, according to Bloomberg’s recession monitor, not long ago that threat was negligible. The more tariffs that Trump imposes, and the longer they are in place, then the higher recession odds will become.”