All in a day's work! After threatening to double down on tariffs for Canadian goods just a few hours back, U.S. President Donald Trump has now suggested he is “probably” willing to reduce recently imposed tariffs on Canadian goods! What caused this sudden change in stance? US Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford had a quick chat today, following which Ontario suspended the 25% surcharge on electricity exports to the United States. This hint of de-escalation from Canada was reciprocated by Trump and follows a rapid series of trade volleys which had Canadian and American businesses on the edges of their seats.
The saga began when Trump imposed 25% tariffs on Canadian imports like steel and aluminum, effective March 4, prompting retaliation from Canada. On March 10, Ontario Premier Doug Ford introduced the electricity surcharge, targeting Michigan, Minnesota, and New York, where Ontario powers 1.5 million homes, costing U.S. consumers an estimated $400,000 daily. Ford threatened to cut exports entirely if tensions rose further.
On the morning of March 11, Trump escalated the conflict, announcing via Truth Social a plan to double tariffs on Canadian steel and aluminum to 50%, effective March 12, calling Canada a “tariff abuser.” He instructed Commerce Secretary Howard Lutnick to implement the hike, citing Ontario’s surcharge and Canada’s dairy protections as justification. Markets slid, with the Dow dropping nearly 600 points.
Yet, a few hours later, Ford suspended the surcharge after talks with Lutnick, who scheduled a March 13 meeting in Washington, D.C., to discuss the U.S.-Mexico-Canada Agreement (USMCA) ahead of Trump’s April 2 tariff deadline. Trump’s subsequent comment about possibly reducing tariffs suggests a shift, possibly driven by pressure from U.S. governors and businesses facing higher energy costs.
The stakes remain high—Ontario’s electricity and Canada’s $21 billion USD in retaliatory tariffs underscore the leverage at play. Thursday’s meeting could determine if this truce holds or if Trump’s doubling threat resurfaces, keeping markets and relations on edge.