Trump’s new tariff threats force Ontario to back down on U.S. electricity tax

• Ontario Premier Doug Ford suspended a 25% surcharge on electricity exports to Michigan, Minnesota, and New York after President Trump threatened to double tariffs on Canadian steel and aluminum.
• Ford initially proposed the surcharge and hinted at cutting off electricity exports entirely, framing it as retaliation against U.S. tariffs.
• Trump responded by threatening to increase tariffs on Canadian steel, aluminum, and automobiles, while criticizing Canada’s reliance on U.S. military protection.
• Ford reversed his decision and agreed to meet U.S. officials to discuss trade disputes, marking a significant retreat from his earlier stance.

Ontario Premier Doug Ford suspended a planned 25% surcharge on electricity exports to Michigan, Minnesota, and New York on Tuesday, just hours after President Trump retaliated with threats to double tariffs on Canadian steel and aluminum. The swift resolution underscores Trump’s assertive leadership in leveraging America’s economic power to protect U.S. consumers and businesses from what he called “unfair” Canadian trade practices.

Ford’s initial threat to impose the surcharge—and his suggestion that Ontario could “shut electricity off completely”—highlighted a concerning willingness to weaponize essential services against American citizens. However, Trump’s immediate response, including a warning of further economic retaliation, forced Ford to back down, demonstrating the effectiveness of Trump’s hardline approach to international trade negotiations.

A high-stakes trade standoff

The conflict began when Ford announced the 25% surcharge on electricity exports, framing it as a response to Trump’s existing tariffs on Canadian steel and aluminum. In an interview with CNBC, Ford defended the move, stating, “If we go into a recession, it will be called the Trump recession.” He also hinted at the possibility of cutting off electricity exports entirely, calling it a “tool in our tool kit” to pressure the U.S. into concessions.

Trump, however, wasted no time in escalating the situation. On Truth Social, he announced plans to double tariffs on Canadian steel and aluminum from 25% to 50%, warning of additional tariffs on Canadian automobiles starting April 2. He also criticized Canada’s reliance on U.S. military protection, claiming American taxpayers subsidize Canada’s national security by more than $200 billion annually.

“If other egregious, long-time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S.,” Trump wrote. “Those cars can easily be made in the USA!”

Ford’s swift reversal

Faced with Trump’s uncompromising stance, Ford quickly reversed course. In a joint statement with U.S. Commerce Secretary Howard Lutnick, Ford confirmed the suspension of the electricity surcharge and agreed to meet with U.S. trade officials to discuss the future of the U.S.-Mexico-Canada Agreement (USMCA) ahead of Trump’s April 2 tariff deadline.

“Secretary Lutnick agreed to officially meet with Premier Ford in Washington on Thursday, March 13, alongside the United States Trade Representative to discuss a renewed USMCA,” the statement read. “In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York, and Minnesota.”

The move marked a significant retreat for Ford, who had earlier vowed to escalate the dispute if necessary. “Let me be clear: I will not hesitate to increase this charge,” Ford had said during his initial announcement. “If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely.”

The swift resolution highlights Trump’s ability to use America’s economic leverage to secure favorable outcomes in trade disputes. White House spokesman Kush Desai praised the president’s approach, stating, “President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people.”

Trump’s willingness to impose significant tariffs and his refusal to back down in the face of Ford’s threats ultimately forced Ontario to retreat. The episode also exposed the risks of using essential services like electricity as bargaining chips in trade negotiations, a tactic that drew sharp criticism from Trump.

“Can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat?” Trump wrote on Truth Social. “They will pay a financial price for this so big that it will be read about in History Books for many years to come!”

Sources for this article include:

YourNews.com

CNBC.com

FoxBusiness.com