President Donald Trump announced on Tuesday a significant increase in tariffs on all imports of steel and aluminum products from Canada, now raising them to 50%. This move comes in direct response to Ontario’s decision to impose a 25% tariff on electricity exports to the United States. On his Truth Social platform, Trump stated that he has directed his commerce secretary to implement an additional 25% tariff on metals, effective the following morning. He expressed frustration over what he termed the “Anti-American Farmer Tariff,” citing dairy product tariffs ranging from 250% to 390% as particularly outrageous.
Trump also indicated plans to declare a National Emergency regarding electricity in the affected areas and warned that he may significantly raise tariffs on imported cars if Canada does not eliminate its existing tariffs. In a counter to Trump’s latest actions, Ontario Premier Doug Ford responded via social media, asserting that his government would not relent until all U.S. tariffs on Canadian imports are completely removed. The ongoing tariff battle had an immediate impact on financial markets. The S&P 500 index dropped nearly 1.0%, raising concerns about the potential negative effects on U.S. economic growth and inflation.
The Toronto Stock Exchange’s S&P/TSX Composite index also saw a decline, reflecting investor unease. Alongside this, broader 25% tariffs on all steel and aluminum imports from various countries, including Canada, are expected to take place soon. These tariffs are part of Trump’s ongoing strategy aimed at bolstering struggling U.S. industries. However, economic analysts are increasingly worried that his aggressive tariff policies could lead to a recession.
Recent surveys indicate a declining sentiment among small businesses, with increasing consensus among economists about the rising risks to the economies of Canada, the U.S., and Mexico.