The United States has escalated its trade dispute with Canada by doubling tariffs on Canadian steel and aluminium imports to 50 percent. U.S. President Donald Trump announced the increase, aiming to balance the trade relationship between the two nations. The tariffs, some of which took effect last week, have drawn strong criticism from Canadian officials and business leaders who warn of potential job losses and economic repercussions.
Canada is the largest foreign supplier of steel and aluminium to the United States, with exports valued at $19.5 billion last year, according to S&P Global data. The Canadian Chamber of Commerce has expressed concerns that these tariffs could lead to significant job losses in Canada's manufacturing sector. As a countermeasure, the Canadian government has labeled the tariffs as "unjustified" and introduced retaliatory levies of their own.
The Trump administration’s unpredictable tariff policies have stirred anger in Canada, with Ontario Premier Doug Ford announcing a 25-percent surcharge on electricity exports to U.S. states Michigan, Minnesota, and New York. This measure could cost families and businesses up to $276,000 (400,000 Canadian dollars) per day. Ford warned of further actions if tensions continue to rise.
“Let me be clear, I will not hesitate to increase this charge. If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely” – Doug Ford
The trade relationship between the U.S. and Canada is substantial, with the U.S. importing $412.7 billion from Canada in 2024 while American exports to Canada totaled $349.4 billion in the same year. Despite these figures, the increased tariffs are a direct hit on Canadian workers, families, and businesses, according to Mark Carney, the new leader of Canada's governing Liberal Party and the country’s next prime minister.
“an attack on Canadian workers, families, and businesses” – Mark Carney
Carney has pledged that his government will craft a response that maximizes impact in the United States while minimizing repercussions for Canadians.
“My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted” – Mark Carney
The economic uncertainty has reverberated through financial markets, with the U.S. stock market experiencing significant declines amid concerns over Trump's economic and trade policies. Larry Summers, a veteran economist and former U.S. treasury secretary, criticized the tariff hike as damaging to both economies.
“Increasing the price of key inputs for the US manufacturing industries–who employ 10 million people–is what a US adversary would do” – Larry Summers
“It is a self-inflicted wound to the US economy that we cannot afford, at a moment when recession risks are rising” – Larry Summers
In response, President Trump quipped about a radical solution to the ongoing trade tensions between the two countries.
“The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear” – Donald Trump
