WASHINGTON — President Donald Trump escalated his trade war with Canada on Tuesday, pledging to double his planned steel and aluminum tariffs on America’s northern neighbor after the province of Ontario said it would charge U.S. customers more for electricity.
Trump said he would increase from 25% to 50% the tariffs due to take effect Wednesday for Canada only, using his authority to declare a national emergency on electricity in the affected areas.
Trump’s action came one day after Ontario said it would put a 25% fee on U.S. energy users in Minnesota, New York and Michigan. Ontario Premier Doug Ford said he expected the surcharge to raise costs for those American consumers by an average of $100 a month. Ford added that “if the United States escalates, I will not hesitate to shut the electricity off completely.”
Trump, in a post on Truth Social, questioned why the US. allows another country to provide electricity, even for a small area.
“Who made these decisions, and why?” Trump wrote. “And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!”
Trump’s tariff tit-for-tats have rattled markets. The Dow Jones Industrial Average was down almost 600 points at noon Tuesday. A day prior the Dow plunged by nearly 900 points. The sell-off has accelerated as U.S. officials battled recession fears. Trump would not rule out an economic slowdown in an interview that aired over the weekend.
“I hate to predict things like that. There is a period of transition because what we’re doing is very big,” Trump said in an interview that aired on “Sunday Morning Futures With Maria Bartiromo.”
Trump previously announced tariffs on Canada and Mexico, some of which he has since delayed. He said last week that products that fall under the USMCA trade agreement would not face a tariff until April. Trump also delayed tariffs on automakers until April 2, effectively halting much of his trade agenda for at least a month. Trump plans to unveil reciprocal tariffs on nations that charge the U.S. fees on the same date.
Against the backdrop of recession concerns, Americans are yet again bracing for a possible government shutdown. Congress has until 11:59 p.m. on Friday to pass legislation to keep the government funded. Otherwise, a majority of federal employees will go without pay or be forced to stop working while most government services pause.
House Republicans unveiled a spending bill that would temporarily keep the government funded until Sept. 30. The a vote on the bill is known as a continuing resolution, is expected later today. But it’s unclear if the bill has enough support to pass the House. Democrats have already spoken out against it.
− Sudiksha Kochi
