In the midst of broader trade talks, the Ontario government backed down on its threat to levy an electricity surcharge on three U.S. states.
Ontario Premier Doug Ford and Commerce Secretary Howard Lutnick issued a joint statement saying they had a “productive conversation about the economic relationship between the United States and Canada.”
The two agreed to meet in person in Washington on Thursday to discuss renewing the US-Mexico-Canada trade agreement ahead of reciprocal tariffs that are set to take effect on April 2.
“In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York and Minnesota,” according to Ford and Lutnick.
President Trump earlier Tuesday threatened to double planned steel and aluminum tariffs on Canada beginning Wednesday, citing Ontario’s decision to charge for electricity exports.
A White House spokesperson confirmed that Trump would no longer follow through on his threat, but previously announced 25% tariffs on steel and aluminum imports would remain in effect.
“President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people,” White House spokesperson Kush Desai said in a statement. “Pursuant to his previous executive orders, a 25 percent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th.”
Trump described Ford as a “gentleman” in talks with the administration.
In 2024, the United States imported more steel and aluminum from Canada than any other country.
Trump earlier Tuesday threatened additional tariffs against Canada in the coming weeks, referring to his administration’s plans to impose reciprocal tariffs on all countries with duties on US products beginning April 2. Trump claimed that tariffs on cars would “essentially, permanently shut down the automobile manufacturing business in Canada.”
The president earlier this month announced 25% tariffs on imports from Canada and Mexico, but he has also announced one-month exemptions for car parts and other goods covered by the U.S.-Mexico-Canada trade agreement, which was signed in 2020 during his first term.
The uncertainty surrounding Trump’s tariff plans has caused a drop in the stock market, and the president has not ruled out the possibility of a recession this year.Ontario agreed to suspend the electricity surcharge ahead of talks with the US
Markets briefly recovered on Tuesday before falling sharply again. The Dow Jones was down 478 points, or 1.13 percent, on the day.
