U.S. President Donald Trump 's threat on Tuesday to double his planned tariffs on steel and aluminum from 25% to 50% for Canada led the provincial government of Ontario to suspend its planned surcharges on electricity sold to the United States.
As a result, the White House trade adviser Peter Navarro said the U.S. president pulled back on his doubling of steel and aluminum tariffs, even as the federal government still plans to place a 25% tariff on all steel and aluminum imports starting Wednesday.
The drama on Tuesday delivered a win for Trump but also amplified concerns about tariffs that have roiled the stock market and stirred recession risks. Tuesday's escalation and cooling in the ongoing trade war between the United States and Canada only compounded the rising sense of uncertainty of how Trump's tariff hikes will affect the economies of both countries.
Trump shocked markets Tuesday morning by saying that the increase of the tariffs set to take effect on Wednesday had been a response to the 25% price hike that Ontario put on electricity sold to the United States.
“I have instructed my Secretary of Commerce to add 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 posted on Truth Social.
Ontario Premier Doug Ford said on Tuesday afternoon that U.S. Commerce Secretary Howard Lutnick called him and Ford agreed to remove the surcharge. He said he was confident that the U.S. president would also stand down on his own plans for 50% tariffs on Canadian steel and aluminum.
“He has to bounce it off the president but I’m pretty confident he will pull back,” Ford said on Trump’s steel and aluminum tariff threat. “By no means are we just going to roll over. What we are going to do is have a constructive conversation.”
After a brutal stock market selloff on Monday and further jitters Tuesday, Trump faces increased pressure to show he has a solid plan to grow the economy. So far the president is doubling down on tariffs and can point to Tuesday's drama as evidence that taxes on imports are a valuable negotiating tool, even if they can generate turmoil in the stock market.
Trump suggested Tuesday that tariffs were critical for changing the U.S. economy, regardless of stock market gyrations.
The U.S. president has given a variety of explanations for his antagonism of Canada. He has said that his separate 25% tariffs on all imports from Canada, some of which are suspended for a month, are about fentanyl smuggling and voicing objections to Canada putting high taxes on dairy imports that penalize U.S. farmers. He also continued to call for Canada to become part of the United States as a solution, which has infuriated Canadian leaders.
“The only thing that makes sense is for Canada to become our cherished Fifty First State," Trump posted Tuesday. "This would make all Tariffs, and everything else, totally disappear.”
Tensions between the United States and Canada
Incoming Canadian Prime Minister Mark Carney said his government will keep tariffs in place until Americans show respect and commit to free trade after Trump threatened historic financial devastation for his country.
Carney, who will be sworn in as Justin Trudeau’s replacement in coming days, said Trump’s latest tariffs are an attack on Canadian workers, families and businesses.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade,” Carney said in a statement.
Canadian officials are planning retaliatory tariffs in response to Trump’s specific steel and aluminum tariffs. Those are expected to be announced Wednesday.
Carney was referring to an initial $30 billion Canadian (US$21 billion) worth of retaliatory tariffs that have been applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Trump also has targeted Mexico with 25% tariffs because of his dissatisfaction over drug trafficking and illegal immigration, though he suspended the taxes on imports that are compliant with the 2020 USMCA trade pact for one month.
Asked if Mexico feared it could face the same 50% tariffs on steel and aluminum as Canada, President Claudia Sheinbaum, said “No, we are respectful.”
Trump was set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that during the 2024 campaign he wooed with the promise of lower corporate tax rates for domestic manufacturers. But his tariffs on Canada, Mexico, China, with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.
The stock market’s vote of no confidence over the past two weeks puts the president in a bind between his enthusiasm for taxing imports and his brand as a politician who understands business based on his own experiences in real estate, media and marketing.
Worries about a recession are growing
The investment bank Goldman Sachs revised down its growth forecast for this year to 1.7% from 2.2% previously. It modestly increased its recession probability to 20% “because the White House has the option to pull back policy changes if downside risks begin to look more serious.”
Trump has tried to assure the public that his tariffs would cause a bit of a “transition” to the economy, with the taxes prodding more companies to begin the years-long process of relocating factories to the United States to avoid the tariffs. But he set off alarms in an interview broadcast on Sunday in which he didn't rule out a possible recession.
The stock market slide continues
The promise of great things ahead did not eliminate anxiety, with the S&P 500 stock index tumbling 2.7% on Monday in an unmistakable Trump slump that has erased the market gains that greeted his victory in November 2024. The S&P 500 index fell roughly 0.2% in Tuesday afternoon trading, paring earlier losses after Ontario backed down on electricity surcharges.
Trump has long relied on the stock market as an economic and political gauge to follow, only to look past it as he remains determined so far to impose tariffs. When he won the election last year, he proclaimed that he wanted his term to be considered to have started Nov. 6, 2024 on Election Day, rather than his Jan. 20, 2025 inauguration, so that he could be credited for post-election stock market gains.
Trump also repeatedly warned of an economic freefall if he lost the election.
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34 Comments
TaiwanIsNotChina
Trump will probably call that a win after backflipping his way to the markets being down 10%.
chotto_2
Such a great deal maker!
Underworld
Trump is making it up as he goes along, and that is causing instability.
And guess what? The markets hate instability.
That's why they are tanking.
I'veSeenFootage
But if tariffs are "tax cuts for the Americans", shouldn't halting those tariffs be... a bad thing?
wallace
Trump ruling with chaos.
patkim
So basically Trump should own up to whatever has happened since November 6. Fair enough. So Trump should take responsibility for this stock market crash and rise in inflation rates and grocery prices as well. You can take the credit when you can, but you also have to be ready to take the blame for the bad as well.
Well, in hindsight, he had it wrong. He should've warned of an economic free fall IF HE HAD WON.
kurisupisu
.
It’s a win-no mistake!
.
Trump ruling with chaos.
.
No. Getting the best deal for the US!
proxy
Markets go up and down but this correction is a big one directly caused by the projected decline in business activity related to the Trump Tariffs. US markets have lost considerably more than the entire GDP of Canada so it looks like Canada is winning.
lincolnman
The Demented Dimwit crumbled just as we expected him to do...
Trump showing everyone his economic expertise and knowledge - the same knowledge that bankrupted a casino...
Putin's Puppet leading the effort to destroy our global reputation and democracy...
Ah_so
I've been trying to work out whether there is a pattern to Trump increasing, lowering or suspending tarrifs.
The only thing that is consistent is that there's a "youbi" in the day of the week. This seems to work every day.
Yrral
Tariffying
lincolnman
Remember Sean Spicer? Trump first WH Spokesperson? The one the went down in flames after a few weeks?
Meet Karoline Leavitt - Sean Spicer Jr;
“He’s actually not implementing tax hikes. Tariffs are a tax hike on foreign countries that have been ripping us off. Tariffs are a tax cut for the American people,” Leavitt said. “And the president is a staunch advocate for tax cuts. As you know, he campaigned on ‘No taxes on tips, no taxes on overtime, no taxes on Social Security benefits.’ He is committed to all three of those things, and he expects Congress to pass them later this year.”
Trump's current, and soon to be fired Spokesperson just tried to tell us a tariff is not a tax hike....which is like saying white is not a color, or steak is not a meat, or Trump is not a Moron...
Bob Fosse
“The only thing that makes sense is for Canada to become our cherished Fifty First State," Trump posted Tuesday. "This would make all Tariffs, and everything else, totally disappear.”
He’s still wasting time on this nonsense?
If tariffs are so great why doesn’t he like it when Canada use them?
WoodyLee
Bets of luck Pres. Trump.
"Here I go again, on my own
Going down the only road I've ever known
And I've made up my mind
I ain't wasting no more time"
White Snake- Here I Go Again.
Bob Fosse
Is that your definition of a leader?
Until tomorrow, then he’ll be backpedaling down the road.
Yrral
All you people want
Trump to.drive you into the poorhouse get on board and enjoy the ride
JJE
Once Trump threatened them to double it, they folded because they know the former is playing a much stronger hand and holds more cards.
Tokyo Guy
His press secretary announced that "tariffs are a tax break for the American people" and then threw a fit when corrected.
You simply cannot believe a single word that comes from this administration.
Blacklabel
Canada backed down, yet again. Explains the deflection and misdirection in the comments.
Blacklabel
China put tariffs on the USA.
is that a tax on Chinese people?
Cause all of you were here bemoaning how this tariff would negatively affect the USA end not China.
just zero consistency in narrative messaging.
stormcrow
As one economist recently said, Trump actually inherited a stable economy from Biden, so Trump should have played golf and done nothing.
Unfortunately, that’s not Trump’s style. Hopefully Trump won’t bankrupt the U.S., but Trump does have a rather shocking record of having gone bankrupt in the past, numerous times.
bass4funk
I knew it, Canada blinked, now the negotiations begin, it’s a start.
bass4funk
Trump hating Libs don’t, the rest of the nation does
Bob Fosse
44% approval rating. Most Americans don’t.
Yeah it’s the same polling group you quoted when it was over 50%. I’m guessing you don’t like them now.
Tokyo Guy
Yeah it’s the same polling group you quoted when it was over 50%. I’m guessing you don’t like them now.
I'm sensing a definite shift towards an even more blatant lying style, if that's possible. If you look at felon's lickspittles when they interact with the media, they now lie as a default style, and, if challenged, automatically become belligerent. For them, there is simply "our reality" and "your reality", and "our reality" is right and "your reality" is wrong.
I remember reading that the etymology of the word "decision" involves the expression "cutting off", the implication being that a decision is a choice to permanently cut off other possibilities. That's what is happening here. The current administration has decided to create its own reality, and has cut off all other possibilities.
People used to make allusions to Orwell and "1984" as a warning, but to be honest it's all happening in real time.
GuruMick
Trump has included Australia in the countries that will have 25% tariffs imposed on their exports.
Sort of ironic because Australia has, for the first time, a trade surplus with the US .
Usually , Australia imports more US commodities than it exports.
Why the change ? This is the funny part......
US investors are so scared of a "Trump induced recession " that they are buying all the Australian gold they can get. This has shifted the balance of trade to favour Australia....this one time.
Gold being a safe haven....a haven from Trump.
Markets don't lie.
MAGA....you bleeding goofballs
bass4funk
Wrong.
49.8% as long as it’s not 22% he’s doing great!
Beg to differ, if they didn’t they wouldn’t have voted for the man. He campaigned on this, he kept his promise, the only people who are surprised are the Trump hating libs that don’t pay attention to anything he does. That doesn’t count.
No, I just use the most reliable and reputable ones
OkinawaRider
POTUS wins again.
Deo Gratias
Trump, again, goes eyeball to eyeball and gets the other side to blink first.
Another day, another win for Trump.
Keep up the good work, Mr. President.
Bob Fosse
Is his approval rating higher now than in January or lower? A simple yes or no will suffice.
I used the same ones. The ones you suddenly don’t trust.
HopeSpringsEternal
All a negotiation. and what DJT really wants is Canada to adopt US tariff rates to world outside of USMCA trade agreement.
Let's see how it plays out, Canada's new PM likely far more practical and less ideological, so trade deals more likely.
GuruMick
So when the US Military Complex wants a coalition of the willing who they gunna call ?
Trump making so many enemies, even old faithful like Canada, and Australia, described by one US military person as "an easy lay "
No . I don't like that either.
Has Trump screwed with Vanuatu yet ?
itsonlyrocknroll
Its pointless, both Incoming Canadian Prime Minister Mark Carney, outgoing Justin Trudeau are being outmaneuvered, President Trump is slippery, a gambling risk taking. bluffing blagger.
Also a consummate survivor, how many times has Trump escaped every attempt to lock him up, only to become President, it wasn't luck, for sure.
patkim
According to the latest Gallup Poll, Trump's approval ratings stand at 45% which is only slightly down from his overall second-term average of 46%. The historical average of presidents stand at 52%. And while 45% seems quite good, it is historically lower than most presidents in their first quarter of their term.
https://news.gallup.com/poll/203198/presidential-approval-ratings-donald-trump.aspx