U.S. President Donald Trump has stepped back from a drastic escalation of the trade war with Canada, which threatened steep tariff hikes on Canadian steel and aluminum, as well as new tariffs on Canadian electricity.
The move came after the Canadian province of Ontario suspended a 25% surcharge on electricity exports to U.S. consumers. This decision followed discussions between U.S. Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford, who announced that they would meet on Thursday to review the United States-Mexico-Canada Agreement (USMCA).
Earlier on Tuesday, Trump had threatened to impose 50% tariffs on Canadian aluminum and steel, a sharp escalation in response to Ontario’s export surcharge. However, he later hinted that he might back down from this threat.
When asked by a reporter at a White House event whether the 50% tariff would remain in effect, Trump avoided a direct answer, saying, “I’ll let you know.”
Shortly after, White House trade and manufacturing adviser Peter Navarro confirmed in an interview with CNBC that Trump’s tariff threat would not take effect. Instead, a 25% tariff on all imported steel and aluminum, including from Canada, came into force at midnight on Wednesday.
Meanwhile, the European Union announced retaliatory measures against the new U.S. tariffs on steel and aluminum imports, which took effect on March 12.
