US and Canada avert trade escalation after tariff threats

The US and Canada reached a mini-détente in their trade war on Tuesday, following a heated exchange between President Donald Trump and Ontario Premier Doug Ford.

After meeting with US Commerce Secretary Howard Lutnick, Ford announced Tuesday afternoon that Ontario would suspend its 25% tariffs on electricity exports to three US states, which had been imposed a day earlier.

In a joint statement, Ford and Lutnick said, “Secretary Lutnick has agreed to formally meet with Premier Ford in Washington on Thursday, March 13, along with the US Trade Representative, to discuss a renewed USMCA [US-Mexico-Canada trade agreement]. In return, Ontario has agreed to suspend its 25% surtax on electricity exports to Michigan, New York, and Minnesota.”

Following this, Trump told reporters at the White House that he would “probably” call off his threat to double tariffs on Canadian steel and aluminum, which were scheduled to take effect as his first order of business on Wednesday.

Trump said, “As you know, there’s a very strong gentleman in Canada who said he was going to charge a surcharge or a tariff on electricity coming into our country. He called, and he said he’s not going to do it. Okay, I’m not going to do it. It would have been a very bad thing if he did, and he’s not going to do it, so I respect that.”

White House spokesperson Kush Desai later confirmed in a statement that the tariffs would not be doubled.

Desai said, “President Trump has once again used the leverage of the American economy, the best and biggest in the world, to make the American people win. As per previous executive orders, the 25% tariff on steel and aluminum, with no exceptions or exemptions, will go into effect for Canada and all our other trading partners at midnight on March 12.”

The conciliatory statements followed several hours of heated rhetoric between the American and Canadian leaders, which began with a post by Trump on his social media platform, Truth Social, attacking Ontario’s electricity tariffs.

Ford had imposed the tariffs in retaliation for Trump’s initial 25% tariffs on all Canadian goods, which went into effect on March 4.

The White House later announced that it was rolling back most of those tariffs following pressure from US automakers, farmers, and other American industries.

In his post Tuesday morning, Trump wrote, “I HAVE INSTRUCTED MY COMMERCE SECRETARY TO ADD AN ADDITIONAL 25% TARIFF, FOR A TOTAL OF 50%, ON ALL STEEL AND ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS IN THE WORLD. This will go into effect TOMORROW MORNING, March 12.”

Trump also said in his lengthy Truth Social post that he would declare a national emergency over electricity, which would allow the US to “expeditiously do what has to be done to mitigate this threat of malice coming in from Canada.”

Repeating his demand that Canada join the US as the “51st state,” the President wrote, “The artificial dividing line drawn many years ago will finally be gone, and we will have the safest and most beautiful Nation anywhere in the world, and your gorgeous anthem ‘O Canada’ will continue to play, but now representing a BIG and POWERFUL STATE within the greatest Nation the World has ever seen!”

Ford immediately responded in an interview with MSNBC, saying, “It doesn’t make sense to fight this way, but I will respond appropriately on electricity. Stay tuned.”

Meanwhile, POLITICO reported that some of Trump’s allies are blaming Commerce Secretary Howard Lutnick for the tariff mishaps.

According to the report, White House and administration officials, as well as Trump’s outside allies, are increasingly frustrated with Lutnick and privately complain about his closeness to the president and his advising him on economic matters.

They claim that Lutnick, who has recently appeared on television, does not even understand the basics of how tariffs and the economy work, and they also point out that he has contradicted the President’s messages at many points in the past week.

One source, suggesting that Lutnick was trying to be a “mini-Trump,” said, “I don’t think he got the message that only Trump can be Trump.”

Lutnick, the former CEO of the financial services firm Cantor Fitzgerald, comes from Wall Street, which has traditionally been skeptical of tariffs, but shares the views of many in the pro-tariff community.