Trump Drops Plan to Double Tariffs on Canadian Steel and Aluminum After Ontario Suspends Energy Export Tax

Ontario suspended its 25 percent electricity export tariff after premier and U.S. commerce secretary spoke on March 11.

A construction worker helps build a support column using steel rebar during the building of a condo tower in Miami, Fla., on Feb. 10, 2025. Joe Raedle/Getty Images

President Donald Trump will not double tariffs on Canadian steel and aluminum after Ontario suspended its 25 percent tax on energy exports in response to U.S. tariffs, White House officials say.

“After President Trump threatened to use his executive powers to retaliate with a colossal 50 percent tariff against Canada, Ontario Premier Doug Ford spoke with Secretary [Howard] Lutnick to convey that he is backing down on implementing a 25 percent charge on electricity exports to the United States,” White House spokesman Kush Desai said on March 11.

“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.”

The announcement comes after Ford said earlier on March 11 that he will suspend the export tax on energy following his conversation with Lutnick and their plan to meet and discuss the successor to the United States-Mexico-Canada Agreement (USMCA) later this week.

“Secretary Lutnick has sent out an olive branch to us, to come down and immediately meet with him,” Ford said during a press conference in Toronto on March 11. “We’re going to be talking about the USMCA moving forward.”

Ford had gone ahead with imposing a 25 percent export tax on electricity his province provides to New York, Michigan, and Minnesota on March 10. The Ontario surcharge was put in place in response to the tariffs the U.S. president has enacted on Canadian products, Ford said.

In February, the Trump administration announced 25 percent tariffs on aluminum and steel imports from all countries effective March 12. Trump said earlier on March 11 that in response to Ontario’s energy surcharge, he was going to double that rate to 50 percent in the case of Canada.

Ford and Lutnick said later in a joint statement that they had a “a productive conversation about the economic relationship” between the two countries and agreed to meet in Washington along with federal Finance Minister Dominic LeBlanc on March 13 to discuss the USMCA.

With the latest tariff hike on Canada suspended by Trump, Canadian steel and aluminum imports to the United States will be subject to 25 percent levies, the same as other countries.

Trump’s Response to Export Tariffs

Ford had said on March 10 that the tax on his province’s electricity exports would amount to $300,000 to $400,000 per day, adding roughly $100 per month to the bills of 1.5 million American households and businesses.

Responding to the surcharge, Trump described Canada as a “tariff abuser” and said in a March 10 Truth Social post that his country would stop “subsidizing Canada.”

“Despite the fact that Canada is charging the USA from 250% to 390% Tariffs on many of our farm products, Ontario just announced a 25% surcharge on ‘electricity,’ of all things, and your not even allowed to do that,” he wrote. “Because our Tariffs are reciprocal, we’ll just get it all back on April 2.”

In a subsequent social media post on March 11, Trump said he will add an additional 25 percent onto the steel and aluminum tariffs from Canada, boosting it to 50 percent.

“This will go into effect TOMORROW MORNING, March 12th,” he wrote. “Also, Canada must immediately drop their Anti-American Farmer Tariff of 250% to 390% on various U.S. dairy products, which has long been considered outrageous.”

Trump said he would declare a national emergency related to electricity “within the threatened area” to allow him to “do what has to be done to alleviate this abusive threat from Canada.”

“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,” he added. “Those cars can easily be made in the USA!”

Trump has repeatedly said over the past few months that the United States does not need Canadian products or resources and has accused the country of taking advantage of the United States.

His March 10 post offered up similar sentiments.

“We don’t need your Cars, we don’t need your Lumber, we don’t [need] your Energy, and very soon, you will find that out,” he said.

Ford had vowed that his government would remain steadfast against U.S. tariffs, and emphasized that Ontario has the ability to adjust the 25 percent surcharge as necessary, or even cut off energy exports, in response to actions taken by the Trump administration.

“U.S. markets are tumbling because of President Trump’s tariffs. Prices are going up for hardworking Americans,” Ford wrote in an earlier March 11 social media post. “He needs to drop the tariffs now, for good. Until he does, Ontario will stand firm.”

Ford also urged the premier of Alberta, Danielle Smith, to put export tariffs on her province’s oil and gas exports to the United States, which she rejected.

“There are much more effective ways Alberta and Canada can work together to persuade the U.S. to change course on their unjustified and self-defeating tariff strategy against Canada without throwing tens of thousands of Albertans and Canadians out of work,” Smith said on March 10.

51st State

In his March 11 social media post, Trump once again repeated his comments that he wants Canada to be a part of the United States, which Canadian officials have strongly rebuked.

“Canada pays very little for National Security, relying on the United States for military protection. We are subsidizing Canada to the tune of more than 200 Billion Dollars a year. WHY??? This cannot continue. The only thing that makes sense is for Canada to become our cherished Fifty First State,” he said.

Canadian officials, including Smith, have said the U.S. trade deficit with Canada, which the office of the U.S. Trade Representative put at US$63.3 billion in goods in 2024, is due to Canada selling oil at a discount to the United States, and that without oil, the United States has a trade surplus with Canada.

Trump said in his social media post that if Canada became a part of the United States, Canadians would save on taxes, have more security, and “the greatest and most powerful nation in the World will be bigger, better and stronger than ever — And Canada will be a big part of that.”

“The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful Nation anywhere in the World — And your brilliant anthem, ‘O Canada,’ will continue to play, but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!” he said.

Canada’s outgoing Prime Minister Justin Trudeau has said that there “isn’t a snowball’s chance in hell that Canada would become part of the United States.”

“Workers and communities in both our countries benefit from being each other’s biggest trading and security partner,” Trudeau said in January.

Tariffs

On March 4, Trump imposed 25 percent tariffs on items imported from Canada, with a lower rate of 10 percent on Canadian energy products, but announced March 5 that the auto sector would receive a reprieve until April 2.

The following day, he issued another executive order that granted an exemption from the 25 percent tariffs for goods covered by the USMCA until April 2. That impacts roughly 38 percent of the goods the United States imports from Canada.

Canada responded by implementing tariffs on CA$30 billion worth of U.S. exports to Canada last week, while suspending tariffs on another CA$125 billion worth of products that was set to go into force three weeks later after the United States paused some of its tariffs. Canadian authorities have also said the country could take other non-tariff retaliatory measures against the United States, hinting that placing export tariffs on energy or cutting energy exports could be on the table.

In addition to the tariffs already introduced, which Trump has said are meant to push Canada and Mexico to address the problem of fentanyl and illegal immigrants entering the United States through their borders, the U.S. president also ordered his officials to review existing trade agreements and recommend additional tariffs by April 2 if any practices are deemed unfair to the United States.

These tariffs are separate from the 25 percent tariffs on steel and aluminum from all countries that are set to come into force on March 12.