Ontario Premier Doug Ford has suspended the planned 25% surcharge on electricity exports to the U.S., following threats of heightened tariffs from President Donald Trump.
The tariff trade-off began with Canada proposing an electricity surcharge and ended with Trump threatening increased tariffs, spurring renewed trade agreement talks.
The Daily Wire reported that initially, Canada aimed to impose a 25% surcharge on electricity sent to the U.S., a move that President Trump countered by proposing doubled tariffs on Canadian steel and aluminum. This escalation of trade tension threatened economic relations between the two nations.
After receiving Trump's retaliatory threats — which included a 50% tariff on steel and aluminum starting the next Wednesday — Ford, in consultation with U.S. Commerce Secretary Howard Lutnick, decided to halt the surcharge temporarily.
This measure was discussed during a “productive conversation” between Ford and Lutnick, shortly after which a meeting was scheduled to discuss trade deal renewals further.
Ford's reversal was not isolated. It was part of a broader set of negotiations aimed at cooling the heightened trade tensions. Both leaders agreed to meet before a U.S.-imposed deadline of April 2, which would see tariffs applied to various international imports.
Despite the diplomatic efforts, Trump's response was swift and severe. Alongside tariff threats, he suggested that national emergencies could be declared in states like Minnesota, New York, and Michigan, which are heavily reliant on Ontario for electricity.
The President also voiced his displeasure on Truth Social, criticizing Canada for leveraging essential services like electricity in trade negotiations, posing a direct threat to U.S. national security and economic stability.
Trump's rhetoric didn't stop at economic threats. He proposed an audacious idea that Canada should become the fifty-first U.S. state, framing it as a rational step towards resolving ongoing trade disputes.
Additionally, Trump demanded that Canada drop its tariffs on U.S. dairy products, threatening further tariffs on Canadian cars.
Trump’s approach reflects his broader strategy of using tariffs as a tool not only for economic leverage but also to address other national issues such as drug trafficking — specifically fentanyl into the U.S.
Trump claimed the U.S. subsidizes Canadian national security to the tune of over $200 billion a year, questioning the sustainability of such financial outlays.
In response, newly elected Canadian Prime Minister Mark Carney vehemently defended Canada's position. On X, formerly Twitter, he criticized Trump's tariffs as attacks on Canadian workers, families, and businesses, promising a calculated response that would minimally impact Canadians while maximizing pressure on the U.S.
Carney committed to maintaining Canadian tariffs and upholding principles of "free and fair trade" until the U.S. demonstrated respect and the willingness to make credible trade commitments. His remarks underscored the growing geopolitical friction exacerbated by trade disputes.
Ford, too, maintained a tough stance, threatening to completely shut off electricity exports to the U.S. if tariff escalations continued.
His bold statement highlighted the intense negotiations and potential for significant economic and political fallout.
As the leaders prepare for their scheduled meeting, the global community watches closely. The outcomes of these talks could redefine North American trade dynamics and have far-reaching impacts on the international economic landscape.