In a major concession following pressure from the United States, Ontario Premier Doug Ford announced Tuesday afternoon that Canada will suspend its 25% surcharge on electricity exports to the U.S. The decision comes in response to President Donald Trump’s threat to impose a 50% tariff on Canadian steel and aluminum imports, escalating trade tensions between the two nations.
Ford made the announcement in a joint statement with U.S. Commerce Secretary Howard Lutnick, revealing that Ontario had agreed to lift the surcharge on electricity exports to Michigan, New York, and Minnesota. The statement also confirmed that Ford would meet with Lutnick and U.S. Trade Representative officials in Washington on March 13 to discuss revisions to the United States-Mexico-Canada Agreement (USMCA) before the April 2 tariff deadline.
The swift reversal from Ontario follows a heated exchange between Trump and Canadian officials. Earlier in the day, Trump posted on Truth Social that he was imposing an additional 25% tariff on Canadian steel and aluminum, bringing the total to 50%, in direct retaliation to Ontario’s electricity surcharge.
Trump also blasted Canada’s long-standing protectionist policies on U.S. dairy imports, calling them “outrageous” and demanding immediate action to eliminate tariffs ranging from 250% to 390% on various American agricultural products.
“If other egregious, long-time tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the tariffs on cars coming into the U.S., which will, essentially, permanently shut down the automobile manufacturing business in Canada,” Trump wrote. “Those cars can easily be made in the USA!”
The president also raised concerns about national security and U.S. reliance on foreign energy, stating he would soon declare a “National Emergency on Electricity” in response to what he described as an “abusive threat from Canada.”
Ford initially responded by describing Trump’s increase in steel and aluminum tariffs as an “unprovoked attack” on Canada.
“We will not back down. We will be relentless. I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs. And it’s unacceptable,” Ford said during an interview on MSNBC. He also urged CEOs to attempt to alter Trump’s stance.
“You see the market tumbling. Consumer confidence is down,” he noted. “And if he continues on with this, assembly plants in Michigan will shut down, and around the country, whoever makes autos, and as well as businesses, they’re going to hurt.”
Now, his decision to roll back the tariff suggests Canada was unwilling to engage in a prolonged trade war with the U.S., particularly one that could cripple its auto sector. Trump’s warning about targeting Canadian auto exports, a major pillar of the country’s economy, likely played a key role in Ford’s decision.
Trump’s aggressive stance appears to have forced Canada’s hand, marking a victory for his trade policies. By leveraging tariffs as a tool for negotiation, the U.S. secured a swift rollback of Ontario’s electricity surcharge without making any concessions in return.
During a White House briefing on Tuesday afternoon, Trump mentioned he was considering lowering tariffs on Canada. When asked if he would indeed reduce them, he responded, “probably so.” He further added, “I’ll let you know” regarding the potential implementation of 50% tariffs on Canada.
“Markets are going to go up and they’re going to go down. But you know what? We have to rebuild our country,” Trump said to the press.
