Donald Trump has announced he is doubling tariffs on Canadian steel and aluminum from 25% to 50% as a retaliation for the province of Ontario’s imposition of a 25% surcharge on electricity exports to several US states, in a dramatic escalation of the trade war between the two ostensibly allied countries.
“Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to ad [sic] an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump wrote on Truth Social.
The president said the tariffs would go into effect in the morning of Wednesday 12 March, and again threatened to make Canada the 51st US state.
Trump’s announcement is just the latest in the chaos around the president’s trade policy, the uncertainty of which has raised concerns about a recession in the US.
Over the last few days, the White House’s strategy has been to play down the anxiety on Wall Street, which has further exacerbated a decline in the stock market. After Trump refused to rule out the possibility of a recession in an interview with Fox News over the weekend, the US stock market continued to drop on Monday. By the end of the day, the Nasdaq had seen its worst day since September 2022, dropping 4%.
The sell-off continued into Tuesday morning after Trump’s announcement, with the Dow dropping 1.2% and the S&P 500 and Nasdaq also declining.
In response to Trump’s new tariffs, the Ontario premier, Doug Ford, told MSNBC that Canada “will not back down” and encouraged American CEOs to speak up. Ford has said in the past that he would be willing to cut off US energy supply from Canada completely in response to Trump’s tariffs.
“We will be relentless,” Ford said on Tuesday. “We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”
Tariffs of 25% on steel and aluminum imports from other countries are expected to go into effect on Wednesday, after Trump announced tariffs for the sector last month.
Trump is set to meet on Tuesday with the Business Roundtable, an influential group of business leaders that includes the CEOs of Google, Amazon and JPMorgan.
The group said in a statement last week that while it supported trade policies that “open markets to US exports, revitalize the domestic manufacturing base and de-risk supply chains”, it called on the White House to “preserve the benefits” of the US-Mexico-Canada Agreement (USMCA) that Trump had signed in 2020.
In recent weeks, both consumer and business confidence has dropped since Trump entered office.
A survey published on Monday in Chief Executive magazine found that CEOs’ rating of the current business climate fell 20% in January from 6.3 out of 10 – with 1 being “poor” and 10 being “excellent” – to 5, the lowest since spring 2020.
Meanwhile, consumer confidence measured by the Conference Board found that confidence dropped over 6% in February, its biggest month-to-month drop since August 2021.
Source: theguardian.com
