Trump Escalates Trade War with Canada, Raises Steel and Aluminum Tariffs to 50%

President Donald Trump announced Tuesday he has ordered his administration to raise tariffs on Canadian steel and aluminum imports by an additional 25%, bringing the total duties to 50%. The new policy will go into effect Wednesday morning, further escalating tensions in the growing trade dispute between the United States and its northern neighbor.

Trump made the announcement in a post on Truth Social, citing Ontario’s recent decision to place a 25% tax on electricity exports to the U.S. as the reason for the tariff increase. “Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into 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,” Trump wrote, according to CNBC.

Ontario’s Premier Doug Ford had imposed the electricity tariff on Monday in response to Trump’s earlier 25% tariffs on Canadian goods. The surcharge affects approximately 1.5 million residents of Michigan, Minnesota, and New York who rely on Canadian electricity, as reported by MSN.

Markets React Negatively

Financial markets, already under pressure from earlier tariff announcements and recession fears, extended their losses following Trump’s announcement. The Dow Jones Industrial Average fell more than 500 points, while the S&P 500 dropped 0.8% and the Nasdaq Composite declined 0.4%.

The escalating trade tensions come at a time when economic indicators have raised concerns about a potential recession, with some analysts warning that protectionist policies could further weaken growth prospects.

Canadian Officials Respond

Minutes after Trump’s announcement, Ford declared he would keep his countermeasure on U.S. energy in place. “We will not back down. We will be relentless,” Ford said on MSNBC. “I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs, and it’s unacceptable.”

In a subsequent interview on CNBC’s “Money Movers,” Ford escalated his rhetoric, saying he would be willing to shut off his province’s energy supply to the U.S. if Trump “continues to hurt Canadian families.” He added, “I won’t hesitate to do that,” though he acknowledged, “that’s the last thing I want to do.”

Ford placed responsibility for any economic fallout squarely on the U.S. president. “There’s one person to be blamed, and that’s President Trump,” he said. “There’s one person to be blamed if we go into a recession, it will be called the Trump recession. No one else.”

Additional Threats and Demands

In his social media post, Trump made several additional threats and demands. He called on Canada to “immediately drop” what he termed an “Anti-American Farmer Tariff” on certain U.S. dairy products, and warned that he would “shortly be declaring a National Emergency on Electricity within the threatened area.”

The president also threatened to “substantially increase” tariffs on auto imports on April 2 if Canada does not lift other “egregious, long time Tariffs” on the U.S. Such action, Trump claimed, would “essentially, permanently shut down the automobile manufacturing business in Canada.”

A senior administration official, speaking on condition of anonymity, told CNBC that Trump had not yet signed the formal paperwork to raise tariffs but that the order is “in the works.” The official described the escalation as intended to “lay down the gauntlet” in response to Ford’s action.

51st State Comments Raise Eyebrows

Trump’s post also repeated his controversial suggestion that Canada should become part of the United States, a stance that has further inflamed tensions between the countries. “The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump wrote.

“This would make all Tariffs, and everything else, totally disappear,” he continued, promising that Canadians’ taxes would go down. “The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful Nation anywhere in the World.”

Canadian Prime Minister Justin Trudeau has previously accused Trump of trying to weaken Canada in order to “annex” it, directly responding to Trump’s repeated calls to make Canada the 51st state. The suggestion has sparked outrage across Canada, where movements have emerged to boycott U.S. products.

Chaotic Trade Policy

Trump’s latest action continues a pattern of unpredictable trade moves that have characterized his administration. The president initially imposed tariffs on Canada and Mexico in early February, before delaying them for one month, then reimposing them, and then partially delaying them again.

Trump has frequently praised tariffs as an economic tool and has promoted April 2 as the date when he will impose widespread “reciprocal tariffs” on countries that have duties on U.S. goods. Critics, however, argue that such policies ultimately harm American consumers and businesses by increasing costs and disrupting supply chains.

The White House has no calls currently scheduled between the president and his Canadian counterparts, according to the administration official, though they expect Ottawa to reach out at some point Tuesday.

As this trade dispute continues to escalate, concerns grow about the economic impact on both sides of the border, particularly in industries with integrated supply chains that rely on the free flow of goods between the United States and Canada.