U.S. President Donald Trump lashed out at Canada Tuesday with a vow to ruin the country economically after Ontario levied a surcharge on U.S.-bound electricity to hit back at Trump’s initial tranche of tariffs.
Trump is promising to hike Wednesday’s expected tariff on Canadian steel and aluminum from 25 to 50 per cent.
The federal government is promising more retaliatory tariffs in response even as there appeared to be a possible breakthrough coming. Ontario Premier Doug Ford agreed Tuesday afternoon to pause his electricity tax and sit down with the U.S. administration for trade talks.
In a series of social media posts this morning, the day after Ford’s electricity levy took effect, Trump said he will make Canada pay “a financial price for this so big that it will be read about in History Books for many years to come.”
Trump upped the ante on his annexation taunts saying the only way for Canada to avoid his attempts to torpedo the economy is for the country to “become our cherished Fifty-First State.”
“This would make all Tariffs, and everything else, totally disappear,” he claimed.
Trump also said he has instructed Commerce Secretary Howard Lutnick to put an additional 25 per cent tariff on all steel and aluminum coming into the U.S. from Canada, bringing the total tariff on those products to 50 per cent starting Wednesday.
He falsely claimed Canada is “ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.”
Until Trump launched his trade war, most Canada-U.S. trade was entirely tariff-free under the Canada-U.S.-Mexico Agreement (CUSMA) the president himself negotiated and signed in his first term.
Ford agrees to pause levy
Amid the ramped-up rhetoric, Ford later agreed to pull back on his electricity levy after speaking with Lutnick.
In a joint statement after the call, Ford and Lutnick said they had a “productive conversation about the economic relationship between the United States and Canada.”
The two, along with U.S. Trade Representative Jamieson Greer, will meet in Washington on Thursday to “discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline,” Ford and Lutnick said, referring to the trilateral free trade deal known as CUSMA in Canada.
At a news conference with reporters, Ford was asked if he received any guarantees from Lutnick that Trump would drop the promised tariff hike to Canadian steel and aluminum exports set to take effect tomorrow.
“He has to bounce it off the president but I’m pretty confident [Trump] will pull back,” Ford said.
Ford said if Trump doesn’t back down then the federal government will “respond dollar for dollar, tariff for tariff.”
U.S. President Donald Trump is pausing tariffs — again — on some goods from Canada and Mexico. Andrew Chang breaks down two schools of thought: whether Trump’s chaotic approach stems from lack of planning, or a much more intentional strategy.
Ford said Finance Minister Dominic LeBlanc, the federal government’s point-person on the Canada-U.S. relationship, and “hopefully” Canada’s ambassador to the U.S., Kirsten Hillman, will also be at Thursday’s meeting.
“Every negotiation starts by sitting at the table. When someone invites you into their home and says let’s sit down at the table, I’m not going to refuse that,” Ford said.
In a statement, LeBlanc said if Trump moves forward with the imposition of tariffs on Canadian products, including steel and aluminum, Ottawa will hit back.
“We will be ready to respond firmly and proportionately. We will never relent in standing up for Canadian jobs, industries and workers,” he said.
Ford’s electricity levy, which could push up costs for more than a million Americans, has grabbed Trump’s attention and renewed his Canadian takeover threats.
Trump said the border between Canada and the U.S., which was first set centuries ago after the American Revolutionary War and reaffirmed by a series of treaties in the years to follow, is “an artificial line of separation” that he wants to see disappear.
“We will have the safest and most beautiful Nation anywhere in the world,” Trump said.
Trump’s claim about Canada becoming safer under American rule is a dubious one at best. The U.S. homicide rate, for example, is nearly four times higher per capita, according to recent U.S. and Canadian data.
Outgoing Prime Minister Justin Trudeau said last week Trump’s tariffs on Canadian goods, which were first floated as a way to supposedly spur a crackdown on drugs and migrants at the border, are designed to prompt “a total collapse of the Canadian economy” so that it’s “easier to annex us.”
Costs on both sides of the border
Ford said Trump’s promised higher tariffs on steel and aluminum will hurt Americans most because U.S. manufacturers are reliant on the supply from Canada.
“The U.S. only has the capacity to produce 16 per cent of the aluminum they need,” Ford said, noting 60 per cent of the other supply comes from Quebec alone.
“Costs are going up. U.S. assembly plants will shut down because they won’t have the aluminum they need or they will be paying three times as much. This is absolute chaos created by one person and that’s Donald Trump,” he said.
It’s a message that was echoed by Candace Laing, the president and CEO of the Canadian Chamber of Commerce, who said Trump is stirring up “economic chaos” that will end badly for him given just how dependent the U.S. is on Canadian metals.
“Canadian steel and aluminum aren’t a nice-to-have for the U.S., they’re a need-to-have — literally,” Laing said.
“These two Canadian metals are the infrastructure that holds up and holds together American defence, homes, cars, energy and countless other symbols of security and strength,” she said.
Lawrence Summers, a former U.S. Treasury secretary, said Trump’s latest tariff threat on metals is “inconceivably bad policy” because it pushes up the price of virtually everything else the U.S. manufactures.
“This is making us less competitive in huge industries,” Summers said in an interview with CBC News.
“This is bad for American working people, bad for American consumers, terrible for American national security and it’s creating huge uncertainty in the markets. It is completely irrational and dangerous policy.”
CBC’s Lorenda Reddekopp breaks down how Doug Ford’s plan to impose a levy on electricity could affect the U.S.
Trump’s tariff rampage sent the U.S. stock market into a tailspin yet again.
The S&P 500, which tracks the 500 largest publicly traded American companies, is down eight per cent in the last month alone. The technology-heavy Nasdaq is off 10 per cent.
Trump’s erratic approach to trade and the economy has sent stock traders into a panic, prompting a rush to sell equities given there is so much uncertainty with Canada, the U.S.’s largest customer.
Trump’s refusal to rule out a possible recession has only made things worse.
“I hate to predict things like that,” Trump told Fox News over the weekend.
Trump also threatened to substantially raise tariffs on cars coming into the U.S. from Canada on April 2 to try and shut down that key industry on this side of the border.
“Those cars can easily be made in the USA!” he said.
Just last week, Trump paused 25 per cent tariffs on some Canadian goods for another month after getting pushback from American business leaders.
But his decision to press ahead with targeted tariffs on steel and aluminum poses a major concern for Canada, given the last time Trump imposed similar tariffs on those metals, there was a huge drop in Canadian exports, threatening jobs and businesses.
According to Statistics Canada data, aluminum exports dropped by roughly half in 2019 as a result of Trump’s trade action in his first term.
Larry Summers, a former U.S. secretary of the treasury, calls U.S. President Donald Trump’s threat to slap 50 per cent tariffs on Canadian aluminum and steel ‘bad for American working people, bad for American consumers, terrible for American national security.’
Prime minister-designate Mark Carney, who is expected to take the reins of power after being sworn in sometime later this week, made it clear where he stands on Trump in his victory speech Sunday night, saying his government will “keep our tariffs on until the Americans show us respect.”
He added in a social media post Tuesday that those retaliatory tariffs will remain in place until the Americans “make credible, reliable commitments to free and fair trade.”
Carney has said he supports dollar-for-dollar retaliatory tariffs and big investments in the Canadian economy to offset the expected damage from Trump ruining the bilateral trading relationship.
Carney’s also been calling for freer internal trade across Canada and has promised a plan to make the country an energy “superpower.”
“The Americans want our resources, our water, our land, our country,” Carney said after winning the leadership in a landslide.
“If they succeed, they will destroy our way of life. America is not Canada. And Canada never, ever, will be part of America in any way, shape or form,” he said.
Conservative Leader Pierre Poilievre strongly condemned Trump’s latest tariff threats, saying his actions “cannot in any way be justified and are yet another betrayal by the president of the long friendship between Canada and the United States.
“Do not mistake our kindness for weakness, we are a strong, proud and sovereign country and we will fight back against these attacks against our economy and our workers,” Poilievre said.
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